Tsalavoutas 2020

Journal of International Accounting, Auditing and Taxation 40 (2020) 100338
Contents lists available at ScienceDirect
Journal of International Accounting,

Auditing and Taxation
Compliance with IFRS mandatory disclosure requirements:

A structured literature review
Ioannis Tsalavoutas a,∗ , Fanis Tsoligkas b , Lisa Evans c
a
University of Glasgow, Adam Smith Business School, West Quadrangle, Main Building, Room G683, University Avenue, Glasgow, G12
8QQ, Scotland, UK
b
University of Bath, School of Management, Wessex House, Room 9.52, Claverton Down, Bath, BA2 7AY, UK
c
University of Stirling, Accounting and Finance Division, Stirling Management School, Stirling, FK9 4LA, Scotland, UK
a r t i c l e i n f o a b s t r a c t
Article history: This paper reviews the literature on compliance with IFRS mandatory disclosure require-
Available online 14 August 2020 ments for the post-2005 period. We adopt a structured literature review methodology
and address three key questions: how is research on compliance with IFRS mandatory
disclosure requirements developing; what is the focus and critique of the literature on
compliance with IFRS mandatory disclosure requirements; and lastly, what is the future
JEL classification: for research on compliance with IFRS mandatory disclosure requirements? We find that
M40 studies mostly draw samples from one country and mainly focus on small markets or less
M41 developed economies. Articles which use sample firms from more than one country tend to
Keywords: examine primarily large firms from European Union (EU) countries. We identify account-
Accounting disclosure ing standards which are commonly associated with low compliance and discuss factors
Mandatory disclosures affecting compliance. We note that only a limited number of studies examine the market
Compliance consequences of compliance. Although we identify multiple scoring methods used in the
IFRS literature, most studies employ a single method in isolation, despite the shortcomings of
Structured literature review this approach. Only a small proportion of studies considers materiality of the disclosures
investigated or performs validity and reliability tests. Finally, we discuss policy implications
arising from this stream of research and suggest avenues for future research.
© 2020 Elsevier Inc. All rights reserved.
1. Introduction
More than 140 jurisdictions now require or permit listed companies to follow International Financial Reporting Standards
(IFRS). Some countries, instead of implementing IFRS, have converged their national accounting standards to IFRS equivalent
standards (e.g., China and Australia). This widespread adoption has provided academic research with a fruitful field, and a vast
literature on IFRS adoption has emerged. Several recent studies have summarized the evidence arising from this literature
(Ahmed, Chalmers, & Khlif, 2013; Ball, 2016; Brüggemann, Hitz, & Sellhorn, 2013; De George, Li, & Shivakumar, 2016; Pope &
McLeay, 2011). The key conclusions of these review papers suggest positive effects arising from the implementation of IFRS
in countries where enforcement is strong. However, even though ‘the extent of compliance with accounting standards is as
important as the standards themselves’ (Hodgdon, Tondkar, Harless, & Adhikari, 2008, p. 1), these papers only tangentially
∗ Corresponding author.
E-mail addresses: Ioannis.Tsalavoutas@glasgow.ac.uk (I. Tsalavoutas), F.Tsoligkas@bath.ac.uk (F. Tsoligkas), Lisa.Evans@stir.ac.uk (L. Evans).
https://doi.org/10.1016/j.intaccaudtax.2020.100338
1061-9518/© 2020 Elsevier Inc. All rights reserved.
2 I. Tsalavoutas, F. Tsoligkas and L. Evans / Journal of International Accounting, Auditing and Taxation 40 (2020) 100338
refer to studies on compliance with IFRS mandatory disclosure requirements.1 Effectively, this strand of the literature is
virtually omitted, in spite of its importance. By contrast, this topic has been covered for the period prior to the widespread
adoption of IFRS in 2005 (Ali, Ahmed, & Henry, 2004; Ali, 2005; Samaha, Khlif, & Dahawy, 2016; Tsalavoutas, 2011).
We address this gap in the post-2005 IFRS disclosure literature by providing a structured literature review (SLR). Our
method draws on an analytical framework with 11 classification criteria, against which we summarize and review 70 studies.
We address the following key questions (as adapted from Dumay, Bernardi, Guthrie, and Demartini (2016) and Massaro,
Dumay, and Guthrie (2016)): 1. How is research on compliance with IFRS mandatory disclosure requirements developing?
2. What is the focus and critique of the literature on compliance with IFRS mandatory disclosure requirements? 3. What
is the future for research on compliance with IFRS mandatory disclosure requirements?2 For the purposes of this review,
when we refer to IFRS, we also include IFRS equivalent standards.
Thus, this paper is part of a relatively recent tradition of structured literature reviews such as, for example, Guthrie,
Ricceri, and Dumay (2012) on intellectual capital; Dumay, Guthrie, and Puntillo (2015) on intellectual capital in the public
sector; Dumay et al. (2016) on integrated reporting; and Cuozzo, Dumay, Palmaccio, and Lombardi (2017) on intellectual
capital disclosure.
We contribute to this tradition the first study to systematically review the literature on mandatory IFRS disclosures for
the post-2005 period, and by discussing the findings, limitations, and gaps in this literature. Specifically, we: 1) identify the
extent of compliance (or non-compliance) with IFRS mandatory disclosure requirements in different settings; 2) respond to
recent calls for research that ‘investigates why non-compliance occurs’ (Tarca, 2019, p.13) by examining the factors which
affect the level of compliance; 3) identify IFRS topics that remain under-examined; 4) highlight key research design issues
in the extant literature; and 5) suggest which avenues for future research would be most fruitful.3
Finally, we contribute to policy-relevant research.4 Standard setters are currently debating the usefulness of mandatory
disclosures. For example, in response to feedback received on the Discussion Paper on the ‘Principles of Disclosures’ IASB
(2017), the International Accounting Standards Board (IASB) added a targeted Standards-level review of disclosure require-
ments to its agenda. As a first step, the Board is, inter alia, ‘developing guidance for the Board itself to use when developing
and drafting disclosure requirements.’5 By identifying and summarizing the key findings of prior research, the present paper
can assist the Board by drawing attention to the topics that need most attention.
The remainder of this paper is organised as follows. Section 2 describes the SLR methodology adopted. Section 3 provides
our core analysis of the papers reviewed. In Section 4, we provide a summary of our key findings and the answers to our
three research questions, and make suggestions for future research. We also outline the policy implications that arise from
our findings. Section 5 concludes the paper.
2. Methodology: structured literature review (SLR)
As a starting point, we established that no comprehensive literature review on post-2005 compliance with IFRS disclosure
requirements existed when data collection commenced. Some papers provide or include such reviews, but relate to the pre-
2005 era (e.g. Ali, 2005; Ali et al., 2004; Samaha et al., 2016;6 Tsalavoutas, 2011). While a small number of papers address
compliance for the post-2005 period, they have a much narrower focus than the present review. For example, Carvalho,
Rodrigues, and Ferreira (2016) only cover IFRS disclosure studies relating to goodwill and business combinations; De George
et al. (2016) discuss only two studies on compliance with IFRS mandatory disclosure requirements; Pope and McLeay (2011)
restrict their review of European Union (EU) IFRS implementation research to the work of the INTACCT Research network
and cite (but do not review) three reports/surveys by professional bodies; Ball (2016) cites only one study on compliance
with IFRS disclosure requirements; and Brüggemann et al. (2013) cover two studies.7 In summary, a comprehensive, critical,
1
For example, De George et al. (2016) and Brüggemann et al. (2013) each make reference only to two such compliance studies, and Ball (2016) cites only
one. Pope and McLeay (2011) cite three reports/surveys by professional bodies.
2
This study excludes literature on voluntary disclosure because detailed reviews already exist (e.g., Beyer, Cohen, Lys, & Walther, 2010; Core, 2001; Healy
& Palepu, 2001) and because the costs and benefits of complying (or not) with mandatory disclosure requirements differ from those relating to voluntary
disclosures (see detailed discussion in Abdullah et al., 2015).
3
Comprehensive literature reviews assist researchers in assessing the current state of knowledge in a specific field, and in identifying under-researched
areas, gaps in existing knowledge and potential contributions to knowledge (Humphrey & Lee, 2004, p.1; Owen, 2004, p.33).
4
Examples of an increased interest by practitioners and regulators on the issue of compliance with IFRS include the following: Institute of Chartered
Accountants in England and Wales (Institute of Chartered Accountants in England & Wales (ICAEW), 2007), European Securities and Markets Authority
(European Security & Markets Authority (ESMA), 2013), Committee of European Securities Regulators (Committee of European Securities Regulators (CESR),
2009), and Tarca (2019).
5
https://www.ifrs.org/projects/work-plan/standards-level-review-of-disclosures/
6
This paper presents a short meta-analysis of 17 articles, 15 of which relate to the pre-2005 period.
7
A recent study by Hellman, Carenys, and Gutierrez (2018) contains a review of studies which inter alia examine compliance with accounting standard
requirements (although its primary purpose is to form the basis of a response letter to the IASB discussion paper on disclosures). However, a large proportion
of the papers included covers periods prior to 2005. This had already been reviewed by Ali (2005), Ali et al. (2004), Samaha et al. (2016), and Tsalavoutas
(2011). Further, Hellman et al. (2018) limit the selection of papers they review on the basis of a single journal ranking list. Finally, several of the studies
reviewed by Hellman et al. (2018) do not capture or report compliance scores. Our study identifies and reviews more than 40 papers that are not covered
by Hellman et al. (2018), 16 of which were published after 2017 (the cut-off point for Hellman et al.’s data collection).
I. Tsalavoutas, F. Tsoligkas and L. Evans / Journal of International Accounting, Auditing and Taxation 40 (2020) 100338 3
Fig. 1. The Structured Literature Review process adopted in the present paper.
and structured review of research examining compliance with IFRS mandatory disclosure requirements for the post-2005
era is lacking.
We adopt an SLR method to address this gap. This requires ten sequential steps (Dumay et al., 2016; Massaro et al., 2016),
which we present in Fig. 1 and discuss in detail below.
2.1. The literature review protocol
As a first step, we developed and outlined a literature review protocol that guided us in developing the SLR. We agreed on
the review objectives, design choices as well as choices with regard to data analysis. This ensured a standardized approach,
which improves the reliability of the process and, in effect, of our findings (Yin, 2014), because the process can be replicated
(Massaro et al., 2016).
2.2. Research questions
According to Massaro et al. (2016) an SLR needs to address at least three key themes: insight, critique, and transformative
redefinitions. For the purpose of the present paper, we reflect on these in three questions (adapted from Massaro et al.
(2016)), which are explicitly stated in the introduction and in Fig. 1. In addition to these contributions to the academic
literature, we also draw on and discuss practice and policy relevant insights. Thus, we contribute to current debates on the
issue of mandatory disclosure requirements in accounting standards (see introduction and Section 4.2).
2.3. The literature search
The third step in the SLR relates to the selection of the data (i.e., studies) for review. We identified this in a process
involving seven stages, which are summarized in Fig. 2 and discussed below.
Given that our primary objective was to provide a review of literature on compliance with IFRS (or IFRS equivalent)
mandatory disclosure requirements for accounting periods from 2005 onwards, relevant studies had to be published from
2006 onwards. Further, we expected that any relevant study would cite at least one prior study that: reviews literature
on such pre-2005 compliance; discusses methodological issues with respect to measuring compliance; and/or examines
Fig. 2. The process employed to identify articles for review.
compliance with disclosure requirements prior to the mandatory adoption of IFRS. Such studies would be cited within
either a literature review or a methods section.
Therefore, as a first stage we identified two reviews of the pre-2005 literature (i.e. Ali, 2005; Samaha et al., 2016), one
methodological study which compares methods for measuring compliance with mandatory disclosure requirements (i.e.
Tsalavoutas, Evans, & Smith, 2010), and two studies which contain comprehensive reviews of the pre-2005 literature (i.e.
Ali et al., 2004; Tsalavoutas, 2011). From the literature cited in these five articles, we identified 39 studies that examine
compliance with mandatory disclosure requirements in the pre-2005 period. The above approach resulted in a total of 44
studies which we used as the basis for identifying relevant studies for accounting periods from 2005 onwards.
As a second stage, we used the software Publish or Perish8 to identify a total of 3,970 unique (i.e., after elimination of
duplicates) citations relating to these 44 studies9 (see Appendix A). In this way we identified the widest possible selection
of papers in the public domain, regardless of the ‘ranking’ of the outlet or the type of study (i.e. academic journal article,
professional research report, or similar) (see e.g., Massaro et al., 2016 and Englund & Gerdin, 2014).
As a third stage, we read the titles, abstracts, keywords (and, where further clarification was required, the research
design sections) of these 3,970 studies. During this process, we eliminated studies that met one or more of the following
conditions: 1) the study uses the term compliance to signify that IFRS were the standards followed, but does not measure
compliance); 2) the study does not quantify compliance; 3) sample companies covered by the study report under IFRS on
a voluntary basis;10 4) the study focuses on disclosures recommended but not mandated by IFRS; 5) non-IFRS mandatory
disclosure requirements are studied; 6) research instruments include both mandatory and voluntary disclosures and the
results are provided on an aggregate level; 7) the study employs firms with financial year-ends prior to 2005; 8) the study
examines companies’ compliance with the voluntary Management Commentary disclosure requirements;11 and 9) the study
is an academic article published in a journal not indexed in the 2018 Academic Journal Guide (2018 AJG),12 the Australian
8
Publish or Perish is a software program that analyses academic citations, drawing on data from Google Scholar and similar sources. The software is
available here: https://harzing.com/resources/publish-or-perish.
9
As of February 19, 2019, the cut-off point for our data collection.
10
Articles examining firms which adopt IFRS on a voluntary basis are eliminated because these companies may have adopted IFRS as a symbol of legitimacy,
but without fully complying with the requirements (see for example McBarnet, 1984; Touron, 2005).
11
We also excluded Tsalavoutas et al. (2010) because this is a methods paper and only examines a small sample of firms.
12
https://charteredabs.org/academic-journal-guide-2018/, Published by the Chartered Association of Business Schools in the UK.
Business Deans Council Journal Quality list (ABDC),13 or Scopus.14 These conditions ensure that the 57 remaining studies
are directly relevant to the review objectives, are credible and, for academic journal articles, are reviewed and published in
established and quality journals.
As a fourth stage, we used Publish or Perish8 to identify studies which cite at least one of the 57 studies identified during
stage three. This revealed that as of February 19, 2019, these 57 studies jointly had 1,335 citations and, after elimination of
duplicates, 910 unique citations.
In a fifth stage, we repeat the process followed in stage three for papers identified in stage four. This resulted in the
identification of additional 13 studies which meet our criteria and should be included in our review.
In a sixth stage, we used Publish or Perish to identify studies which cite at least one of the 13 studies identified during
stage five. This revealed that, as of February 19, 2019, these 13 studies jointly had 38 citations, relating to further 37 studies.
In the seventh and final stage, we repeat the process followed in stage three for papers identified in stage six. We identify
that these 37 studies either did not meet our criteria or had been considered already.
The process described above resulted in a total of 70 studies for review. Of these, two were research reports rather than
articles published in academic journals.15 Of the 68 journal articles we review, 41 are published in journals which are indexed
in AJG, ABDC, and Scopus, eight in ABDC alone, seven in AJG and ABDC, six in ABDC and Scopus, five in Scopus alone, and
one in AJG alone.
2.4. Article impact
Citations are an indicator of interest in an area of research (Dumay et al., 2016). According to Google Scholar, as of February
19, 2019, the 70 studies we review had themselves been cited 1,373 times. Therefore, we confirm that there is a considerable
level of interest in this area. Of the above 1,373 citations, 1,260 relate to 63 articles published in journals indexed in either
the AJG or ABDC lists. Forty four of these articles are published in journals ranked as AJG rank 2 or above or ABDC rank B or
above, and have 1,125 aggregate citations. Nineteen articles having 135 citations are published in journals with the lowest
ranks in AJG (rank 1) or ABDC (rank C). The two professional reports jointly have 74 citations. This confirms that the studies
we review are influential in the wider literature.
Further, following Dumay et al. (2016), we use two alternative measures of impact to identify the most influential studies:
total citations and citations per year (CPY). The latter mitigates against bias towards older studies (Dumay & Dai, 2017). We
present separately, in Table 1, the top ten of our 70 studies by total citations (Panel A) and by CPY (Panel B).
Nine studies are included in both lists of top ten. Carlin and Finch (2010), who examine compliance by Australian firms
with goodwill related disclosures, appears only in the top ten list by total citations, while Mazzi, André, Dionysiou, and
Tsalavoutas (2017), who examine the effect of compliance on the cost of equity capital for a sample of EU firms, appears only
in the top ten list by CPY. All but three of the top CPY articles were published in or after 2012. For instance, Glaum, Schmidt,
Street, and Vogel (2013) has been cited 165 times with a CPY of 27.5. The above confirms the contemporary and continuing
relevance of the topic.
2.5. The analytical framework
To develop the framework for analysis, we first considered the criteria and attributes16 used by both Dumay et al. (2016)
and Guthrie et al. (2012) that we deemed relevant to our context (Jurisdiction, Country of research, Focus of literature, Research
methods). Subsequently, in line with Broadbent and Guthrie (2008), two authors coded five articles independently to test the
13
https://abdc.edu.au/latest/1036/
14
Journal rankings, as measures of research quality, have been widely criticised, especially when taken in isolation. Therefore, we also include Scopus,
which offers alternative quality measure in the form of several metrics. However, while each of these three rankings and metrics may provide an indication
of journal quality (and even that has to be taken with caution), they cannot be used as proxy for the quality of articles published in the respective journal.
This is supported by evidence from the most recent evaluation of research quality by the UK’s higher education funding bodies (Research Excellence
Framework, REF 2014), which showed only weak correlation between quality of papers (as based on independent peer review) and journal rankings (Pidd
& Broadbent, 2015; see also Guthrie, Parker, Dumay, & Milne, 2019). In essence, article quality alone does not determine the choice of outlet because
ontological and political considerations also come into play. While many highly ranked North American journals publish predominantly research that
assumes market efficiency and is based on positive accounting and related theories, many papers we review suggest ineffective enforcement mechanisms
and weak institutional environments. North American academics and journals may be less inclined towards such research, or research drawing on data
from other jurisdictions (see Bédard & Gendron, 2003; De Villiers & Dumay, 2013; Parker & Guthrie, 2014). This restricts researchers in their choice of outlet.
If we exclude papers in Scopus, our review would focus primarily on firms from the EU and Australia. We would not cover, inter alia, Brazil, Egypt, France,
Ghana, Portugal, and Singapore. Our findings would be extremely biased, and reinforce the mistaken belief that either all jurisdictions closely resemble
the North American models, or that those that differ are irrelevant. We would not provide insights into what is known and remains unknown in other
jurisdictions.
15
These were commissioned and published by a professional and an academic institution, respectively (Amiraslani et al., 2013; Tsalavoutas et al., 2014).
Prior SLR studies frequently include a separate criterion in the analytical framework to distinguish between academic and professional reports (e.g. Dumay
et al., 2016). Since our data included only two such research reports, and both were authored by academics, we do not discuss this as a separate criterion,
but we identify these studies separately in Appendix B.
16
We follow Massaro et al. (2016, p. 783) in our definition of criteria as ‘units of analysis within selected papers’ that we treat ‘as independent elements
to be measured and analyzed’. We define as attributes the sub-units of analysis within the selected studies.
Table 1
Indicative impact of articles reviewed.
Reference Article
Panel A: Top ten articles based on total Google Scholar citations. Google Scholar Citations*
Glaum et al. (2013) Compliance with IFRS 3- and IAS 36-required disclosures across 17 European 165
countries: company- and country-level determinants
Cascino and Gassen (2015) What drives the comparability effect of mandatory IFRS adoption? 134
Bova and Periera (2012) The determinants and consequences of heterogeneous IFRS compliance levels 111
following mandatory IFRS adoption: Evidence from a developing country
Carlin and Finch (2011) Goodwill impairment testing under IFRS: a false impossible shore? 109
Verriest et al. (2013) The Impact of Corporate Governance on IFRS Adoption Choices 88
Tsalavoutas (2011) Transition to IFRS and compliance with mandatory disclosure requirements: 75
What is the signal?
Carlin and Finch (2010) Resisting compliance with IFRS goodwill accounting and reporting disclosures: 61
Evidence from Australia.
Amiraslani et al. (2013) Accounting for asset impairment: a test for IFRS compliance across Europe 51
Tsalavoutas and Dionysiou (2014) Value relevance of IFRS mandatory disclosure requirements 51
Baboukardos and Rimmell (2014) Goodwill under IFRS: relevance and disclosures in an unfavourable 43
environment
Panel B: Top ten articles based on citations per year (CPY) CPY*
Cascino and Gassen (2015) What drives the comparability effect of mandatory IFRS adoption? 33.5
Glaum et al. (2013) Compliance with IFRS 3- and IAS 36-required disclosures across 17 European 27.5
countries: company- and country-level determinants
Bova and Periera (2012) The determinants and consequences of heterogeneous IFRS compliance levels 15.9
following mandatory IFRS adoption: Evidence from a developing country
Verriest et al. (2013) The Impact of Corporate Governance on IFRS Adoption Choices 14.7
Carlin and Finch (2011) Goodwill impairment testing under IFRS: a false impossible shore 13.6
Tsalavoutas and Dionysiou (2014) Value relevance of IFRS mandatory disclosure requirements 10.2
Mazzi et al. (2017) Compliance with goodwill-related mandatory disclosure requirements and 9.5
the cost of equity capital
Tsalavoutas (2011) Transition to IFRS and compliance with mandatory disclosure requirements: 9.4
What is the signal?
Baboukardos and Rimmell (2014) Goodwill under IFRS: relevance and disclosures in an unfavourable 8.6
environment
Amiraslani et al. (2013) Accounting for asset impairment: a test for IFRS compliance across Europe: 8.5
*
As of 19 February 2019.
suitability of this preliminary framework. This step resulted in changing the criteria Country of research to Location/Regions,
Jurisdiction to Number of countries, and Focus of literature to Research question. The criteria’s respective attributes were also
amended. Additionally, because our paper places special emphasis on the research methods applied in the studies reviewed,
we substituted the criterion Research methods with eight criteria to capture specific research design issues, i.e., Research
instrument, Scoring method, Validity and reliability, Materiality, Sample composition, Firm size filter, First year of adoption, and
Accounting topic examined. Differences in the methods may significantly affect the conclusions and may partly explain the
mixed findings in the literature prior to 2005 (Ali, 2005; Tsalavoutas, 2011).17
Table 2 lists these 11 criteria and their respective attributes (as well as our results discussed in greater detail in section
3). In the interest of transparency and reliability, Appendix B reports the information attributes for each of the 70 studies.
Appendix B also includes two additional pieces of information for each study: sample size (number of firms/observations)
and the ranking of the journal in which the study was published. As neither of these are pertinent to our research questions,
we refrain from adding them as separate criteria in our analytical framework.
2.6. Developing reliability
To limit the risk of bias and to ensure reliability of the coding and the analytical framework, two authors then again
independently read and coded five articles. Subsequently, the third author acted as an independent reviewer/moderator.
We discussed and clarified discrepancies and then independently coded four additional papers. No further discrepancies
arose and no further reliability checks were deemed necessary.
2.7. Testing literature review validity
Three main areas require validity tests: internal validity, external validity, and construct validity (Massaro et al., 2016;
White & McBurney, 2012). Internal validity relates to the extent to which the criteria we identify are comprehensive and
appropriate, i.e. capture patterns in the literature reviewed (Massaro et al., 2016 with reference to Yin, 2014). This was
17
The most important issues, in this respect, relate to the research instruments and to scoring methods (compliance measurement), the validity and
reliability of the research instruments, and the relevance/materiality of the information that the researchers aimed to capture.
Table 2
Results of analysis based on 11 criteria.
A Number of countries F First year of adoption

A1 Single country 55 F1 Yes 10
A2 Two countries 5 F2 No 60
A3 Five countries 1 Total 70
A4 More than five countries 9
Total 70 G Research instrument
G1 Self-constructed 55
B Firm size filter G2 Audit firms’ samples 8
B1 Yes 28 G3 Prior literature 6
B2 No 41 G4 Other 1
B3 NM 1 Total 70
Total 70
H Scoring method
C Location/Regions H1 Cooke’s 36
C1 Europe 23 H2 Cooke’s adjusted 4
C2 Asia 24 H3 PC method 2
C3 Oceania/Australia 7 H4 Item by item 11
C4 Africa 10 H5 Counting items 3
C5 South America 3 H6 PC and Cooke’s 8
C6 Worldwide 3 H7 Other 6
Total 70 Total 70
D Research question (RQ) I Validity & reliability

D1 Compliance alone 18 I1 Yes/Yes 17
D2 Determinants 42 I2 Yes/No 11
D3 Determinants and market consequences 4 I3 No/Yes 8
D4 Market consequences alone 6 I4 No/No 32
Total 70 I5 NA/Yes 1
I6 N/A 1
E Accounting topic examined Total 70
E1 Multiple topics 26
E2 Goodwill and goodwill impairment testing 19 K Materiality
E3 Financial instruments 7 K1 Yes 14
E4 Business combinations 4 K2 No reference 56
E5 Related party transactions 3 Total 70
E6 Income tax 3
E7 Presentation of financial statements 2 L Sample composition
E8 Other 6 L1 Financial firms included (Inc) 30
Total 70 L2 Financial firms excluded (Exc) 32
L3 Financial firms alone (FF) 2
L4 Not mentioned (NM) 6
Total 70
Adapted from Dumay et al. (2016) and Guthrie et al. (2012).
ensured by the process discussed in Section 2.5. External validity in SLRs ensures ‘the comprehensiveness of the sources
used’ (Massaro et al., 2016, p. 786). For our purposes, this was ensured by the process described in Section 2.3 (see also
Dumay et al., 2016). Finally, construct validity is concerned with the quality of the measures used (in this instance, the studies
reviewed). Massaro et al. (2016) note that this can be ensured through the analysis of citations. Given our conclusions in
Section 2.4, we are satisfied that our data meets the requirements of construct validity (see also Dumay et al., 2016).
2.8. Coding
Having defined the analytical framework and performed reliability testing, one author coded the articles we review and
captured the result in Excel. Ambiguities were resolved by consulting the co-authors. In total, 30 studies were subjected to
such discussion and scrutiny by the team.
3. Insight and critique
This section discusses the literature on compliance with IFRS mandatory disclosure requirements and provides answers to
two of our three research questions, namely: “how is research on compliance with IFRS mandatory disclosure requirements
developing?” and “what is the focus and critique of the literature on compliance with IFRS mandatory disclosure require-
ments?” We discuss the key features of the literature, based on the 11 criteria of our analytical framework (see Section 2.5;
step 5 in Fig. 1). The summary findings for each criterion and across the various attributes are reported in Table 2.
We outline the insights and the critique arising from our analysis in the sub-sections below. For each criterion, we begin
by explaining the rationale for our selection. In several instances, we report information for one criterion by also reflecting on
Fig. 3. Number of relevant single- and multi-country studies.
features of another criterion. This is consistent with Massaro et al.’s (2016, p. 788) suggestion to present, where appropriate,
statistical analysis across criteria, in order to develop ‘deeper insights and relationships between categories [criteria] within
the dataset’ (emphasis added). To ease the flow of the discussion, we refrain from citing the respective studies in the text.18
These and their attributes should instead be accessed in Appendix B.
3.1. Number of countries (A1 – A4)
This criterion captures whether a study’s sample is drawn from one or from several countries and allows us to examine
whether compliance differs across countries and whether country characteristics can explain such differences. Attribute A1
(Single country) identifies articles that draw on data from a single country. Articles which use sample firms from two, five,
or more than five countries are classified under attributes A2, A3, and A4 respectively.
The vast majority of articles (55/70) are single-country studies (A1). Five studies draw on firms from two (predominantly
EU) countries (A2), one study on five (A3), and the remaining nine studies on data from more than five countries (A4). As
shown in Fig. 3, interests in multi-country studies is a much more recent phenomenon and the first multi-country studies
were published in 2013. We also note that at least one multi-country study is published every year until 2018.
Given the resource implications of manual data collection, the personal interests of the researchers, and their under-
standing and knowledge of specific socio-economic contexts, the preference for single-country studies is not surprising.
The most recent year’s data examined in any study reviewed is 2016, which is the focus of two studies that each employ
sample firms from a small and developing economy. The most recent year examined by multi-country studies is 2015.
Indirectly, our ‘Number of countries’ criterion (A1) also reflects firm size, since cross-country studies usually only sample
from firms with the highest market capitalization or firms belonging in the corresponding premier stock market indexes.
Conversely, single country studies are more likely to focus on a wider size-range of firms, which is confirmed by our criterion
Firm size.
3.2. Firm size filter (B1 – B3)
This criterion allows us to examine whether the literature focuses on larger firms. It is important because disclosure
incentives differ between smaller and larger firms, which affects the inferences that can be drawn. The large majority of
the studies (66) focus on listed firms, while only three include both listed and non-listed firms and one is silent on listing
status.19
Confirming our observation above (Section 3.1), we find that two-thirds (10/15) of the multi-country studies (A2-A4)
do indeed sample from larger firms, i.e. focus on firms listed in the local premier stock market indexes. By contrast, only
18 of the 55 single-country studies (A1) draw on firms listed in the premier market segment (e.g., FTSE 100 in the UK) or
sample from a given number of large firms (e.g., 100 largest firms). While one study is silent on this matter, the remaining 37
single-country studies and 5 multi-country studies do not apply such a filter but tend to employ sample firms from smaller
or developing markets.20 Most studies that examine the determinants of compliance establish a significant positive impact
of firm size on compliance levels (see D2 and D3, Section 3.4). In other words, higher levels of non-compliance will occur in
samples comprising, or including, smaller firms. While this suggests a need for further research on the disclosure practices
18
We make this choice because including all references for all attributes would lengthen the paper considerably and, more importantly, result in an
extremely cluttered text, which would be difficult to read. Alternatively, including only selected references would inevitably introduce bias.
19
We do not create a separate criterion for listing status, since only Bova and Pereira (2012) provide separate statistics for both listed and non-listed
firms.
20
Bova and Pereira (2012) draw their sample from firms considered by the Institute of Certified Public Accountings of Kenya (ICPAK) for 2006 FiRe Awards.
The criteria applied by the ICPAK are not explicitly stated; hence, we classify this study as B3.
Fig. 4. Number of relevant studies per country. *EU refers to studies which focus on multiple EU countries.
of smaller firms, the number of studies employing a firm size filter has increased over time, indicating that the literature is
shifting the focus to larger firms.
3.3. Location/Regions (C1 – C6)
Th Location/Regions criterion allows us to identify geographic areas from which samples were selected, as well as areas
that are under-researched. We classify studies as follows: C1 for countries in Europe, C2 for countries in Asia, C3 for countries
in Oceania/Australia, C4 for countries in Africa, C5 for countries in South America, and C6 (“Worldwide”) for two studies
which employ samples from several regions.
While Canada adopted IFRS in 2011, we identified no studies on compliance by Canadian firms. By contrast, three studies
exist for Brazil, which adopted IFRS in 2010. This may be consistent with the ontological and epistemological divide between
North American and European research referred to in footnote 13 and identified by Dumay et al. (2016) with respect to other
areas of research.
Thus, we find that there appears to be a continuing interest in European firms, with a total of 23 studies (C1). Since 2010,
and with the exception of 2012, at least one such study has been published annually. Eleven studies focus on more than one
EU country. Among the single country studies, Greece was the focus of four (although sample size and period significantly
overlap for three), and the UK of three studies (with no significant overlap of sample, period, or accounting topic). We
also note an increasing interest in Asia (C2), with at least one study published every year except for 2012: seven studies
cover Malaysia, and four Kuwait. Finally, for Oceania/Australia (C3), seven studies exist on compliance by Australian firms.
These trends can be partially explained by the timing of the adoption of IFRS (i.e., earlier adoption in EU and Australia and
more recent adoption in Asian countries). In some cases, the time periods examined by the Asian and the Australian studies
overlap. Fig. 4 lists the countries examined by the articles reviewed in this study.
3.4. Research question (D1 – D4)
Although all studies capture compliance with IFRS mandatory disclosure requirements, they examine different research
questions. In this section, we pinpoint those that have been over or under explored.
We disaggregate the studies reviewed across four attributes: Compliance alone (D1) for papers that report only the level of
compliance; Determinants (D2) if, in addition to measuring compliance, they provide insights into the factors associated with
compliance; Determinants and market consequences (D3) for studies that examine both the factors associated with compliance
levels and the impact of compliance on capital markets; and Market consequences alone (D4) for studies that, in addition
to measuring compliance, examine the impact of compliance on capital markets but do not examine the determinants of
compliance. Thus, the main difference between attributes D3 and D4 is that the former examines both the factors that are
associated with compliance and the capital market consequences of compliance, while the latter only focuses upon capital
market consequences. The following observations arise from this analysis.
More than a quarter of studies examine Compliance alone (18/70, studies D1), which is usually measured by means of
a disclosure index. While they may provide information on the items complied with, they tend to be descriptive and do
not provide a more holistic view of what determines compliance, and/or whether any market consequences arise from the
variation in disclosure levels.
The large majority of studies explore determinants of compliance (42/70). The most common determinants considered
include audit firm size (18 studies), firm size (17 studies), and leverage (11 studies). Further, from 2012, corporate governance
characteristics have been considered as determinants and were investigated by 15 studies. Only one study provides evidence
that product market competition is a significant determinant, which suggests that little research exists on the effect of
proprietary costs. That is despite the argument that proprietary costs incentivize non-compliance (see Abdullah, Evans,
Fraser, & Tsalavoutas, 2015). (We discuss the determinants of compliance in greater detail in Section 3.5).
Research on market consequences (10/70 studies; D3 and D4 combined) is more recent. The first study was published
in 2012 and at least one study is published annually since 2014. This indicates an increasing interest in the impact of
compliance on capital markets. We identified nine studies that employ a single methodological approach to examine the
valuation implication of compliance. Specifically, six studies examine the impact of compliance levels on market values, one
study on the cost of equity capital, one study on trading volume, and one study on the earnings response coefficient (ERC).
Only one study employs multiple approaches to examine the valuation implications of mandatory disclosures (the impact of
compliance on analysts’ forecasts and market values). All studies focus on equity markets only; there is no relevant research
on debt markets. The evidence mostly indicates that compliance has favorable market consequences, with the exception
of two studies, one of which shows that compliance is not value relevant, the other finds that compliance weakens the
relationship between current returns and earnings.
Of the above ten studies, seven focus on small or developing economies (i.e. Brazil, Greece, Kenya, Malaysia, and Jordan),
one on a single large and developed economy (France), and two examine large firms across the EU. Thus, there is a research
gap relating to the market consequences of compliance by smaller firms from developed economies.
3.5. Accounting topic examined (E1 – E8)
There are more than 40 extant IFRS. Because of the resource implications of hand-collecting data, researchers frequently
select from these. This is also a matter of trade-off with other decisions relating to sample selection, such as number of
companies selected, whether a firm size filter is adopted, or the number of firm years covered.
Almost 37% of the studies (26/70) examine a combination of topics, which we discuss under the attribute Multiple topics
(E1). The remaining 44 studies cover 12 individual topics, among which Goodwill and goodwill impairment testing (E2) received
the most attention. Aside from the latter, from 2014 there appears to be an increasing trend towards individual topic studies.
Despite this shift in emphasis, studies of Multiple topics (E1) remain popular, perhaps because they provide evidence of a
firms’ overall compliance practices. However, the findings from this strand of this literature must be interpreted with caution,
as compliance measures aggregated over several standards will disguise the economic consequences or compliance drivers
of individual standards. Below we address this concern by identifying the current state of knowledge and discussing the key
findings for each topic separately.
3.5.1. Multiple topics (E1)

In most of the 26 studies that explore multiple topics, average compliance ranges between 70% and 90%, with a large
number of companies scoring compliance levels below 70%. In many cases minimum levels are very low, while high compli-
ance of above 90% is very rare. Eleven studies do not provide separate compliance scores for individual standards; therefore,
it is not possible to identify particularly problematic standards.21
Reflecting on the criterion Research question (D), we note that 20 studies examine potential explanatory variables for com-
pliance (D2 and D3), three studies are coded as Compliance alone (D1), and the remaining three are Market consequences alone
(D4). At least one study focusing on multiple topics has been published annually since 2010, indicative of the interest in this
stream of literature (see Fig. 5). The first study examining market consequences of compliance with several standards/topics
was published in 2012.
Cross-referencing to Number of countries (A), we note that the large majority of studies that explore multiple topics are
single country studies (19/26). (For reasons discussed above, large-scale, multi-country studies tend to focus on larger and
developed markets and limit their sample to larger firms.) The single-country studies with large data-sets are limited to
developed economies with smaller stock exchanges, such as Greece, or to developing and emerging economies, including
Bahrain, Brazil, Ghana, Jordan, Kuwait, Malaysia, Nigeria, Saudi Arabia, and Turkey. This confirms our earlier conclusion, in
Section 3.2, that smaller listed companies remain largely unexplored.
Further, consistent with the suggestion that country level influences affect de facto application of IFRS (e.g. Ball, 2006;
Nobes, 2006), our review also indicates that the level of compliance varies significantly among countries. For example, firms
listed in some developing or emerging economies, such as Ghana and Malaysia, tend to comply relatively more than firms in
other such economies, as for example Brazil, or even in some developed economies, such as Greece. A possible explanation
for this may be that Malaysia is ranked higher than Brazil and Greece in terms of enforcement (see Brown, Preiato, & Tarca,
2014). Several studies do in fact support the suggestion that quality of enforcement is positively related to compliance (e.g.,
Tsalavoutas, André, & Dionysiou, 2014).
21
An exception among the remaining 15 studies is Che Azmi and English (2016), who provide information on the number of firms exhibiting full
compliance, partial compliance, and no compliance for each of eight standards examined.
Fig. 5. Number of studies focusing on Multiple topics (E1) by research question and publication year.
Fig. 6. Number of studies focusing on Goodwill and goodwill impairment testing (E2) by research question and publication year.
Audit quality (proxied by audit firm size) also appears to be positively associated with compliance levels, as is firm size.
While leverage and profitability tend to be significantly associated with compliance levels, the sign of the relationships,
however, differs between studies.
As only seven of the multi-topic studies consider corporate governance characteristics or ownership structure, these
topics remain underexplored. Findings suggest that board independence is positively associated with compliance levels,
while CEO duality is negatively associated.
Finally, the most recent financial period examined is 2014, in studies for firms in Australia and for a worldwide sample
of Islamic Banks. Thus, evidence on compliance with a combination of topics of IFRS mandatory disclosure requirements for
more recent periods and for many economies across the world is lacking.
3.5.2. Goodwill and goodwill impairment testing (E2)

Goodwill/goodwill impairment testing is the most prominent among the single compliance issues explored in prior
research. This may be the case because goodwill is relevant for many companies/groups, and testing for goodwill impairment
under IFRS is complex (Hoogendoorn, 2006; Wines, Dagwell, & Windsor, 2007). In fact, most of the descriptive studies which
assess Compliance alone focus on Goodwill and goodwill impairment testing (9/19). Fig. 6 highlights a growth of Compliance alone
studies up to 2013, and a significant shift from 2013 to arguably more informative research that also examines explanatory
factors for compliance and its market consequences.
Compliance with disclosure requirements relating to Goodwill and goodwill impairment testing is, on average, low, but
with significant improvement over time. However, the most recent evidence relates to the financial years 2015 for German
firms and 2012 for Malaysian firms. Areas of non-compliance relate to proprietary information. The majority of studies focus
on European countries, Australia, and Malaysia. The evidence highlights significant country differences in compliance levels.
With few exceptions, the studies examine large firms. Firm size and being audited by a Big 4 auditor are factors which
contribute to higher levels of compliance. Further, only Bepari and Mollik (2015) consider and find that a governance related
factor is positively related to the compliance levels identified. Only two studies explore market consequences arising from
the varying levels of explicitly goodwill related disclosures: Baboukardos and Rimmel (2014) who show that disclosures
improve the value relevance of goodwill and Mazzi et al. (2017) who find that compliance levels are negatively related to
the cost of equity capital.
3.5.3. Financial instruments (E3)

Financial instruments (E3) is a controversial topic as it involves highly complicated accounting treatments (ACCA
(Association of Chartered Certified Accountants), 2011; Larson & Street, 2004). Although the topic has been on the agenda
of regulators, standard setters, and enforcement bodies for years, there is relatively little research on compliance with the
relevant mandatory disclosure requirements. Studies which explicitly focus on this area are recent, motivated by the imple-
mentation of IFRS 7, and cover primarily small and developing markets (specifically Botswana, Jordan, Malawi, Qatar, and
Ghana). Thus, with the exception of Bamber, McMeeking, and Petrovic (2018), who employ a sample of UK firms, research on
companies in large and developed stock markets is virtually non-existent.22 Further, four of these studies examine the fac-
tors that affect compliance levels consider a governance related factor and document a positive correlation with compliance.
Finally, only one study (Tahat, Dunne, Fifield, & Power, 2016) examines the market consequences of compliance with the
disclosure requirements of IFRS 7 and shows a positive correlation between firm value and compliance. Thus, evidence on
the market effects of (non)compliance levels with regard to disclosures around financial instruments is almost non-existent.
3.5.4. Business combinations (E4)

Studies on Business combinations (E4) have covered China, Brazil, and large European firms. Evidence on smaller firms
in more developed countries is generally scarce. Further, only the study by Souza and Borba (2017) examines the market
effects of (non-) compliance and shows that the compliance level is positively associated with share prices.
In general, compliance with IFRS 3 is relatively high, although with significant differences between countries.23 With the
exception of Souza and Borba (2017), who focus on Brazil between 2010 and 2013, the most recent evidence covers periods
only up to 2010. Thus, more recent evidence based on large samples from large and developed stock markets is generally
absent. Additionally, only two studies examine the factors that affect the level of compliance. Key findings suggest that cross
listed firms and firms from common law countries are more likely to exhibit higher levels of compliance. Further, leverage,
profitability, and a Big 4 auditor are positively related to compliance.
3.5.5. Related party transactions (E5)

Only three studies focus on disclosures with respect to Related party transactions (E5). They examine firms from Ghana,
United Arab Emirates, and South Africa. Thus, evidence on companies from large and developed stock markets is again
absent.
Evidence on the level of compliance is inconclusive, with South African firms exhibiting high levels of compliance, and
firms in Ghana and UAE exhibiting lower levels of compliance. All three papers present evidence that strong governance
mechanisms (e.g., audit committee expertise and independence, board independence) contribute positively to compliance.24
The most recent evidence regarding compliance with IAS 24 is available for 2016. Finally, we note that no study has yet
investigated the market consequences of (non-) compliance with the disclosure requirements of IAS 24.
3.5.6. Income tax (E6)

Three studies deal explicitly with disclosures mandated by IAS 12, for Egyptian, Portuguese, and Malaysian firms. Although
all three examine the determinants of compliance, only two consider the effect of audit quality and only one considers a
governance related factor. The evidence indicates that better audit quality and stronger corporate governance are factors
positively related to compliance levels.25
No evidence exists on the market consequences of (non-)compliance. Further, more recent studies of large and developed
markets are limited, as evidence on this topic is available only up to 2010 - with the exception of Wang (2018), who examines
compliance for the financial years 2006, 2010, and 2014.
22
Four studies classified under the Multiple topics attribute (E1) touch on the issue very briefly, and the most recent of these dates from 2015. With respect
to IAS 32, they report the following compliance levels: mean (median) compliance is 80% (83%) in Greece (Tsalavoutas, 2011; Tsalavoutas & Dionysiou,
2014) and mean (median) compliance is 89% (91%) in Malaysia (Abdullah et al., 2015). With respect to IAS 39 the following compliance levels are reported:
mean (median) compliance is 46% (50%) and 70% (100%) for German and Italian firms, respectively (Cascino & Gassen, 2015). In addition to these studies,
Santos et al. (2014) combine parts of IAS 32 with IAS 39 and IAS 39 with IFRS 7, thus creating two topics, namely “Transaction Costs and Premium on the
Issuance of Securities” and “Financial Instruments”, respectively. The authors only present aggregated findings with regard to these two topics.
23
Compliance scores for business combinations are also presented by several studies coded as Multiple topics (E1). These suggest low compliance in Brazil
and Kuwait, and higher compliance among (large) European firms, and in Malaysia and Greece. Specifically, the following compliance levels are reported:
mean (median) compliance is 77% (80%) in Malaysia (Abdullah et al., 2015), 70% (78%) in Greece (Tsalavoutas, 2011; Tsalavoutas & Dionysiou, 2014), 30%
in Kuwait (Dawd, 2018), and 12% in Brazil (Santos et al., 2014). Finally, Tsalavoutas et al. (2014) report that the mean (median) compliance is 81% (84%) for
their worldwide sample.
24
Studies classified under Multiple topics (E1) also provide compliance scores for this standard and generally find low levels of compliance, with the
exception of companies in Greece. The following compliance levels are reported: mean compliance is 74% in Kuwait (Dawd, 2018) and 11% in Brazil (Santos
et al., 2014), and the mean (median) compliance is 77% (80%) in Greece (Tsalavoutas, 2011; Tsalavoutas & Dionysiou, 2014). Additionally, Verriest et al.
(2013) focusing on certain mandatory disclosure items show that mean compliance is 3.21 with maximum being four.
25
Further, four studies classified under Multiple topics (E1) include evidence relating to IAS 12. These report significant differences in compliance levels
among countries. The following compliance levels are reported: mean compliance is 30% in Brazil (Santos et al., 2014) and in Greece mean (median)
compliance is 74% (83%) (Tsalavoutas, 2011; Tsalavoutas & Dionysiou, 2014). Wang (2018) reports that compliance is close to 100%.
3.5.7. Presentation of financial statements (E7)

Only two studies focus exclusively on compliance with mandatory disclosure requirements for IAS 1 (E7). They draw
on firms from Bahrain and Malaysia, and present evidence of high levels of compliance.26 This also suggests a high level
of compliance. Since IAS 1 disclosures do not carry high proprietary and preparation costs (Al-Shammari, Brown, & Tarca,
2008; Tsalavoutas, 2011), this is not surprising.
3.5.8. Other (E8)

Finally, six studies are allocated to the attribute Other (E8) because each covers a single topic not addressed by other
studies: share based payments (using French companies), operating leases (Spanish companies), intangible assets (South
African companies), provisions (Turkish companies), decommission costs (UK companies), and the accounting treatment of
exploration costs (several regions).
The only study to provide evidence on market consequences is Goh, Joos, and Soonawalla (2016), who show that high
compliance levels improve the value relevance of stock option expenses. The evidence presented in the above articles, as
well as in additional Multiple topics studies (E1), suggests high levels of compliance for IAS 38 and low compliance with IAS
37. There is mixed evidence of compliance with IFRS 2, with significant variation across countries. Recent studies of large
and developed markets are generally scarce.
3.5.9. Evidence on compliance with disclosure requirements for specific accounting standards
Studies frequently focus on a combination of accounting topics and, therefore, disclosure requirements relating to more
than one accounting standard (i.e., E1 and E2 in Table 2). This impedes identification of standards which are more or less
demanding or costly to comply with.
Therefore, we isolate and collate the evidence relating to individual standards. As our observations arising from this arose
incidentally, during the process of analysis rather than based on our analytical framework, we report them separately below.
Table 3 presents the frequency with which each standard was examined in the studies discussed above, the number of
studies which report separate compliance scores for each standard, and the frequency with which each standard is associated
with low compliance (i.e., mean score lower than 75%).27 Further, the last column in Table 3 reports the studies to which
these findings relate. This, in combination with Appendix B, will assist readers to make inferences regarding the countries
and periods to which the low compliance scores relate.
Several standards are consistently associated with low compliance, namely IAS 17, 21, 28, 31, 37, 39, and 41, as well as
IFRS 6 and 8. In fact, all studies that provide separate compliance scores for these standards report compliance levels lower
than 75%. This evidence relates to Australia, Brazil, Germany, Greece, Italy, Kuwait, and Malaysia. Except for Australia, all
these studies examine the first or very early years of IFRS adoption.
Further, although IAS 19, 23, 36, and 40, as well as IFRS 5 and 7 are included in the disclosure checklists of several studies,
few report compliance scores for these standards separately. Those who do report low compliance levels. Therefore, we
note an absence of detailed evidence (i.e. in-depth, ‘single topic’ studies) on compliance with key areas such as leasing (IAS
17) (now IFRS 16), post-retirement benefits (IAS 19), share-based payments (IFRS 2), provisions and contingent liabilities
(IAS 37), and investments in associates and joint ventures (i.e., IAS 28, IAS 31 (now IFRS 11)). For example, there is a lack of
evidence on the specific disclosure requirements, within these standards, with which companies fail to comply, and on the
potential explanatory factors associated with compliance levels.
Finally, since the large majority (19/26) of studies in Multiple topics (E1) are single-country studies, the evidence on
compliance with these key areas is also limited to a small number of countries.
3.6. First year of adoption (F1 – F2)
We include the criterion First year of adoption because low compliance in the early years of transition to IFRS may simply
be due to preparers’ and auditors’ lack of familiarity with the requirements (see Kvaal & Nobes, 2012). Only ten studies
in our sample focus on only the first-year adoption of IFRS (F1), while the remaining studies (60) employ a sample period
subsequent to the first year of adoption, or of the first year and subsequent years after adoption (F2).
Of the four studies that examine compliance in the first year of IFRS adoption only, one each focuses on Goodwill and
goodwill impairment testing, Business combinations, Share-based payments, and Financial instruments. The remaining six studies
focus on Multiple topics. Of these, five examine compliance with the mandatory disclosure requirements of a large number
of standards (six or more accounting standards) and one examines compliance with two accounting standards (IFRS 3 and
IAS 36).
26
Additional evidence is presented by five Multiple topics studies (E1). The following compliance levels are reported: mean (median) compliance is 96%
(97%) in Malaysia (Abdullah et al., 2015) and in Greece mean (median) compliance is 95% (96%) (Tsalavoutas, 2011; Tsalavoutas & Dionysiou, 2014). Wang
(2018) reports that compliance is close to 100%. Verriest et al. (2013) focusing on certain mandatory disclosure items shows that mean compliance is 2.91
with maximum being three.
27
As noted above, not all studies report separate compliance scores for individual standards.
Table 3
Frequency of accounting standards examined and frequency of low compliance.
Accounting No. of studies No. of studies Frequency of low Percentage of Studies reporting low compliance
standard examining examining compliance (i.e. studies presenting (Appendix B provides the means to
compliance with compliance with this mean lower than evidence of low identify settings and time periods
this standard standard and present 75%) compliance associated with low compliance
compliance score scores)
IAS 17 9 6 6 100% Abdullah et al. (2015); Cascino and

Gassen (2015); Dawd (2018); Santos
et al. (2014); Tsalavoutas (2011);
Tsalavoutas and Dionysiou (2014)
IAS 21 7 3 3 100% Dawd (2018); Tsalavoutas (2011);
IAS 31 5 3 3 100% Santos et al. (2014); Tsalavoutas
(2011); Tsalavoutas and Dionysiou
(2014)
IAS 37 10 5 5 100% Dawd (2018); Santos et al. (2014);
Tsalavoutas (2011); Tsalavoutas and
Dionysiou (2014); Wang (2018)
IAS 39 1 1 1 100% Cascino and Gassen (2015)
IAS 41 2 2 2 100% Tsalavoutas (2011); Tsalavoutas and
Dionysiou (2014)
IFRS 6 4 2 2 100% Tsalavoutas (2011); Tsalavoutas and
Dionysiou (2014)
IFRS 8 4 2 2 100% Dawd (2018); Santos et al. (2014)
IFRS 7 12 7 6 86% Agyei-Mensah (2017a, 2017b);
Dawd (2018); Tahat, Mardini, and
Power, 2017, 2016); Tauringana and
Chithambo (2016)
IAS 36 22 13 11 85% Abdullah et al. (2015); Baboukardos
and Rimmel (2014); Bepari and
Mollik (2015); Bepari et al. (2014);
Cascino and Gassen (2015); Dawd
(2018); Hartwig (2015); Rahman,
Mohamed, Laili, and Khairi (2018);
Santos et al. (2014); Tsalavoutas
(2011); Tsalavoutas and Dionysiou
(2014)
IAS 12 7 6 5 83% Lopes (2014); Mgammal, Bardai, and
Ku Ismail (2018); Santos et al.
(2014); Tsalavoutas (2011);
IAS 19 8 6 5 83% Abdullah et al. (2015); Cascino and
Gassen (2015); Santos et al. (2014);
Dionysiou (2014)
IAS 40 9 5 4 80% Dawd (2018); Santos et al. (2014);
Dionysiou (2014)
IFRS 5 10 5 4 80% Dawd (2018); Santos et al. (2014);
Dionysiou (2014)
Dionysiou (2014)
Dionysiou (2014)
IAS 24 12 7 4 57% Agyei-Mensah (2019a); Dawd
(2018); ElKelish (2017); Santos et al.
(2014)
IFRS 2 11 7 4 57% Cascino and Gassen (2015); Dawd
(2018); Goh et al. (2016); Santos
et al. (2014)
IFRS 3 19 11 6 55% Dawd (2018); Florio, Lionzo, and
Corbella (2018)); Santos et al.
(2014), Souza and Borba (2016),
Dionysiou (2014)
IAS 2 8 5 2 40% Dawd (2018); Santos et al. (2014),
Table 3 (Continued)
Accounting No. of studies No. of studies Frequency of low Percentage of Studies reporting low compliance
standard examining examining compliance (i.e. studies presenting (Appendix B provides the means to
compliance with compliance with this mean lower than evidence of low identify settings and time periods
this standard standard and present 75%) compliance associated with low compliance
compliance score scores)
IAS 38 16 10 4 40% Agyei-Mensah (2018), Cascino and

Gassen (2015); Dawd (2018); Santos
et al. (2014)
IAS 11 5 3 1 33% Cascino and Gassen (2015)
IAS 16 11 6 2 33% Dawd (2018); Santos et al. (2014)
IFRS 1 5 3 1 33% Santos et al. (2014)
IAS 10 9 4 1 25% Santos et al. (2014)
IAS 18 9 4 1 25% Santos et al. (2014)
IAS 27 8 4 1 25% Santos et al. (2014)
IAS 33 10 5 1 20% Santos et al. (2014)
IAS 1 12 7 0 0% –
IAS 20 2 2 0 0% –
IAS 32 6 3 0 0% –
IAS 7 8 4 0 0% –
IAS 30 1 0 0 – –
IFRS 12 1 0 0 – –
IFRS 13 1 0 0 – –
IFRS 4 2 0 0 – –
We observe significant differences between countries. For instance, firms from Brazil and Nigeria exhibit lower compli-
ance scores compared to firms from Greece or other European countries, although the former two countries adopted IFRS
later. Tsalavoutas and Dionysiou (2014), the only study examining the market consequences of compliance in the year of
IFRS adoption, shows that compliance is positively related to market values. Overall, given the relatively small number of
studies that focus exclusively on the first year of adoption, it is unlikely that our findings about non-compliance across all
studies reviewed are driven by transitional effects.
Of the 60 studies that focus on periods after the first year of adoption (F2), 33 are longitudinal studies. Of these, 16 employ
sample firms from larger and developed markets, and of those, 11 specifically focus on the larger firms in these markets (B1).
Few studies examine smaller firms from large and developed markets.
Further, six of the 33 longitudinal studies provide evidence of statistically significant improvement in compliance over
time while one study documents no statistically significant improvement. Ten studies indicate an improvement but do not
test whether this is statistically significant. Finally, 16 studies do not report compliance levels across the different years
examined, but amalgamate scores for the entire period.
3.7. Research instrument (G1 – G4)
The criterion Research instrument captures the types of instruments used to measure compliance. Disclosure checklists,
against which information provided in companies’ annual reports is scored manually, are the most common instrument for
measuring compliance and used by all studies but one (classified as Other (G4)). Fifty-five studies employ a self-constructed
disclosure checklist (G1), eight use a disclosure checklist developed by audit firms (G2), and six utilize a disclosure list used
by a previous academic study (G3). Given the prevalence of self-constructed disclosure checklists, a discussion of validity
and reliability of the instruments is pertinent. Following a discussion of the scoring methods employed, we discuss the issue
of validity and reliability of the instruments in Section 3.9.
3.8. Scoring method (H1 – H7)
The way compliance scores are computed can differ significantly. We use the criterion Scoring method to capture and
portray the variety of methods used. We now discuss the five following methods: Cooke’s method (H1), Cooke’s adjusted (H2),
PC method (H3), item by item (H4), and counting items (H5).
Cooke’s method computes compliance as the ratio of the total number of items disclosed to the maximum possible
number of disclosure items. Items considered as non-applicable to a particular firm are excluded from the computation.
With 46 studies using it, this method is the most widely applied. Thirty-six studies apply it alone (H1) and 10 combine it
with an additional method (H6 or H7).
Instead of a simple binary choice, Cooke’s adjusted is computed based on the completeness of the disclosure, i.e. the level
of detail provided. It considers whether an item is fully, partially, or not at all disclosed. Obviously, this method can be very
subjective. Four studies used it alone (H2), while one has used it in combination with another method.
The Partial Compliance (PC) method is relevant only when the index is divided into sections/categories, for example
by standards or topics. This applies to all 26 studies with the attribute Multiple topics (E1) and to some with the attribute
Goodwill and goodwill impairment testing (E2).28 The researcher first calculates the compliance ratio for each standard/topic
separately, then adds these individual scores and divides them by the total number of standards/topics. This approach gives
equal weight to each standard/topic and avoids the swamping of fewer but more important disclosure items by more trivial,
but more frequent ones (the main limitation associated with Cooke’s method).29 Two studies used this method alone (H3),
eight in combination with Cooke’s method (H6), and one in combination with another method (H7).
Used by 11 studies, another common scoring method which we call the “item by item” method (H4) examines compliance
with each item mandated by the accounting standard separately. Although this approach does not provide a compliance
score at the firm-year level, it provides insights into which particular items companies in a given sample disclose.
Three studies follow a Counting items approach (H5), which does not express compliance as a percentage but simply
calculates the total number of items for which relevant information is disclosed.
We classify the remaining six studies as Other (H8). Mazzi et al. (2017) employ three scoring methods: Cooke’s method;
a second method whereby the compliance levels resulting from Cooke’s method are transformed to accommodate country
differences, and the ‘SAIDIN’ index method, which weights each disclosure item by the percentage of firms in the sample that
do not comply with the item (as a result, more common (rare) applicable disclosures receive lower (higher) weights). Devalle,
Rizzato, and Busso (2016) employ Cooke’s method, SAIDIN, the PC method, and a PC weighted method (which incorporate the
weights from the SAIDIN index in the calculation of compliance scores under the PC method). Further, Lazar and Velte (2018)
employ the PC weighted method, along with Cooke’s adjusted method. Additionally, two studies measure compliance by
using a binary indicator/dummy variable. Acar and Ozkan’s (2017) indicates the presence (or not) of all mandatory disclosure
requirements relating to IAS 37, and Arimany, Fitó, Moya, and Orgaz (2018) measure the disclosure (or not) of a mandatory
operating leases note to the financial statements. Finally, Bova and Pereira (2012) employ an externally produced compliance
score.
Overall, there is a significant variation of techniques used to measure compliance. The level of compliance reported, as
well as the inferences drawn, can differ substantially depending on the method used, as is apparent when two or more
methods are used concurrently. This suggests that when only one method is used the results may be significantly biased.
However, only a small proportion of studies (11) employ multiple methods for robustness purposes.
3.9. Validity and reliability (I1 – I6)
The scoring process involves judgment during at least two key stages: when developing the disclosure list and when
scoring firms. The first relates to the content validity of the research instrument, i.e., the adequacy of the instrument to
measure the concept of interest (i.e., compliance). The second relates to the reliability of the research instrument, i.e. how well
compliance is measured in terms of precision, stability, and consistency. Thus, this criterion allows us to draw conclusions
as to how (and if) the studies assure the validity and reliability of the research instruments they employ.
Surprisingly, only 17 studies explicitly refer to validity and reliability (I1). Eleven studies document a validity test (I2), and
eight a reliability test only (I3). Thirty-three studies make no reference to either test (33/70) (I4). For Arimany et al. (2018),
with their binary/indicator variable, a content validity test is not applicable, so we classified this study as I5. Finally, for
the one study using an externally calculated score (Bova & Pereira, 2012), neither test is applicable (hence I6). The relative
proportion of studies which do not perform a validity or reliability test is decreasing over time, which suggests that the
studies are becoming methodologically more robust.
Of the 28 studies which explicitly consider validity (I1 and I2), 14 employ a self-constructed research instrument (G1)
and use the following methods to ensure its validity. In two studies, the authors checked the disclosure checklist against
disclosure checklists prepared by one or more Big 4 audit firm. In 11 studies the checklist was reviewed by a party independent
of its construction – typically either a member of the research team or a professional accountant. One study compared the
instrument against checklists prepared by audit firms and used in prior literature. Validity is taken as a given attribute in
eight studies that employed research instruments constructed by Big 4 audit firms (G2) and in six studies that drew on
instruments from previously published studies (G3).
Finally, the 26 studies that performed a reliability test (I1, I3 and I5) applied the following process: The authors and/or an
independent expert score a small sample of annual reports independently. Subsequently, the scorers compare the findings.
If differences are significant, the areas that resulted in such differences are discussed and resolved before coding continues
for the remaining annual reports. Only Arimany et al. (2018) contact each firm in the sample directly to determine whether
or not a firm discloses an item.
28
e.g. Mazzi et al. (2017) is not relevant here because the authors combine the relevant items from IFRS 3 and IAS 36 in one category
29
See Tsalavoutas et al. (2010) for a detailed discussion of the differences between these two scoring methods. Tsalavoutas et al. (2010; footnote 4) also
refer to an alternative weighted disclosure index methodology which attaches a weighting (value) to each disclosure item, based on the item’s perceived
importance. We did not identify any studies that apply this method and fall within the scope of our review.
3.10. Materiality (K1 and K2)
An inherent limitation of the disclosure index method relates to the subjective judgement involved over whether a
disclosure requirement is not complied with by, or not applicable/relevant to, a specific company. This is the case irrespective
of the scoring method employed. To minimise the risk of identifying an item as non-compliance when it is in fact not
applicable, Cooke (1992) recommends a thorough reading of the complete annual report prior to scoring. If a company
discusses a specific topic or event, it can be assumed that the relevant disclosure items in the checklist are applicable. For
example, if a company reports a value of inventories on the balance sheet, the disclosure requirements in IAS 2 are applicable.
This is standard practice, and all studies included in this review either explicitly state, or imply, that they followed this process.
Standard setters are critical of companies’ box-ticking (rather than judgment-based) approach to compliance with dis-
closure requirements. The IASB increasingly emphasizes that management must use their judgement in determining and
disclosing relevant and material information. The Basis of Conclusions (30C) in the revised IAS 1 (2014) explicitly states that
a company does not need to disclose information that is designated as ‘shall be disclosed’ if this information is not material.
In general, therefore, very careful judgement is required in the data collection/scoring process, because absent information
may indicate either non-compliance or information deemed immaterial or irrelevant. However, judgement regarding the
relevance of disclosures may differ between management and the audit firm on the one hand, and financial statement users
and enforcers on the other hand (especially since no clear guidance is provided by the latter on materiality thresholds.)
Therefore, we examined the research design section of the studies for reference to a materiality threshold. We found
that only 10 mostly recent studies (since 2013) employed a materiality threshold at the stage of sample selection and/or
scoring. For example, Bepari, Rahman, and Mollik (2014) deem as material reported goodwill greater than five percent of
company total assets. Only where this threshold is met are the related disclosure requirements considered applicable. A
similar approach is taken by Tsalavoutas et al. (2014) for disclosures relating to impairment testing. Thus, one may argue
that studies that do not incorporate a materiality threshold introduce bias by counting as non-compliance what should, in
fact, be considered not applicable.
Four further studies which examine the determinants of compliance (D2 & D3), report significant correlations between
materiality and compliance levels. Specifically, Glaum et al. (2013), Bepari et al. (2014), and Lazar and Velte (2018) introduce
goodwill intensity and the existence of goodwill impairment as determinants in their multivariate analysis. Goh et al. (2016)
control for the proportion of shares under option schemes in the context of share-based payment. The significant impact of
materiality on compliance further supports the importance and consideration of materiality in such studies.
3.11. Sample composition (L1 – L4)
In the empirical archival accounting and finance literature, it is common for financial companies to be excluded from
analysis because of differences in financial statement items and in applicable regulations. However, financial companies tend
to be large and economically important. Since disclosures can have important market consequences, the lack of evidence
relating to the financial sector is a significant omission from the literature. So, our last criterion reflects the extent to which
studies include financial companies.
We find that 30 of the 70 studies include financial firms (L1), 32 do not (L2), and six remain silent (L4). Only two studies
focus exclusively on financial institutions (L3) and examine compliance with disclosure requirements relating to Multiple
topics (E1): Ajili and Bouri (2018) employ a global sample of Islamic Banks and Zureigat (2015) draws on a sample of financial
institutions listed in Saudi Arabia. Of the 30 studies which include financial firms (L1), only 13 separately report compliance
scores for firms in the financial industry or include a categorical variable explicitly controlling for financial institutions in
multivariate analysis. Thus, only limited evidence on the compliance levels of financial firms is available. Interestingly, only
one of these 13 studies examine compliance with financial instruments, which are of particular importance to the financial
sector. Nine studies examine Goodwill and goodwill impairment testing, one relates to the presentation of financial statements,
and two we classified under Multiple topics. Among all 26 Multiple topic studies (E1), only ten state explicitly that they include
financial firms.
Our findings suggest that there is a large research gap in the examination of financial companies’ compliance with IFRS
disclosure requirements. This is particularly the case for developed countries and for topics/standards which are of particular
importance to financial firms.
4. Answers to the questions explored, avenues for future research, and policy implications
4.1. Answers to the questions explored and avenues for future research
Having described, summarized, and analyzed the research on compliance with IFRS mandatory disclosure studies for the
post-2005 period, Table 4 outlines the answers to the three research questions addressed in this review. It also maps the
attributes of the relevant literature.
First, overall, it appears that the vast majority of companies do not comply with all mandated disclosure requirements, and
that there are considerable differences between firms, accounting standards, and countries. Studies draw on data from 2014
or earlier, except for five studies which include data from 2015 and/or 2016. Longitudinal studies tend to report increasing
Table 4
Research questions and summary of key findings.
Attributes (as summarized in 1. How is research on 2. What is the focus and 3. What is the future for
Table 2) compliance with IFRS critique of the literature on research on compliance with
mandatory disclosure compliance with IFRS IFRS mandatory disclosure
requirements developing? mandatory disclosure requirements?
requirements?
Number of countries (A1 – A4) Studies which employ firms The majority of prior studies There is a lack of evidence on
from more than one country examine compliance in a single compliance with IFRS
were published more recently, country (55/70). mandatory disclosure
starting from 2013. requirements for more recent
periods and for many
economies across the world.
More research also is needed
on country characteristics as
key determinants of
compliance levels.
Firm size filter (B1 – B3) The number of studies that The majority of the studies There is a lack of evidence
employ a size filter and focus (41/70) do not employ a firm relating to smaller firms from
on larger firms is increasing. size filter and mostly sample developed or large markets.
from smaller or developing This is particularly important
markets. Studies that adopt a since studies which examine
firm size filter tend to focus on the determinants of
larger firms and employ compliance show that firm size
sample firms from more has a significant positive
developed markets and from impact on compliance.
more than one country.
Location/Regions (C1 – C6) There is increasing interest in Among European countries, Future research could focus on
Asian and EU firms. Most Greece and the UK have been Canada, for which we have no
research on Oceania/Australia extensively covered, although studies to date.
focuses on goodwill; the first only the Greek studies examine
“multiple topic” study was compliance with several
published only recently (Wang, standards.
2018).
Research question D1 – D4) The first study exploring There is extensive focus on the There is almost no evidence for
market consequences of determinants of compliance. the effect of proprietary costs
compliance was published in The most common on compliance. Also, the effect
2012. Likewise, corporate determinants examined are of compliance on debt markets
governance or ownership firm size, corporate has not been examined, nor
characteristics as factors that governance measures, and have other market
drive compliance were first leverage. The most common consequences, i.e. the
explored in a study published approach employed to informativeness of earnings or
in 2012. examine market consequences synchronicity.
is to examine the association
between compliance scores
and equity market values.
Accounting topic examined (E1 Studies focusing on goodwill Focus is primarily on multiple Future research should report
– E9) have advanced, since 2013, topics and on goodwill. compliance scores for each
from exploring compliance standard separately, in order to
alone to examining allow identification of areas of
determinants and market low compliance. There is a lack
consequences of compliance. of evidence on compliance
Studies focusing on individual with key areas such as leasing
topics other than goodwill have (IAS 17) (now IFRS 16),
been published since 2014. post-retirement benefits (IAS
19), share-based payments
(IFRS 2), provisions and
contingent liabilities (IAS 37),
and investments in associates
and joint ventures (i.e., IAS 28,
IAS 31 (now IFRS 11)).
First year of adoption The main focus has been Longitudinal studies
(F1 – F2) sample periods subsequent to employing smaller firms from
the first year of adoption, or of large and developed markets
first year and subsequent years are limited.
of adoption (60 studies). The
majority of these studies (33
studies) are longitudinal. Most
show that compliance
improves over time.
Table 4 (Continued)
Attributes (as summarized in 1. How is research on 2. What is the focus and 3. What is the future for
Table 2) compliance with IFRS critique of the literature on research on compliance with
mandatory disclosure compliance with IFRS IFRS mandatory disclosure
requirements developing? mandatory disclosure requirements?
requirements?
Research instrument (G1 – G5) The relative proportion of Studies employ primarily Future research should
& Validity and reliability (I1 – studies which do not perform a self-constructed research perform and explicitly state
I6) validity or reliability test is instruments. Only a small what measures were taken to
decreasing over time. number of studies explicitly ensure robustness of the
refer to both a validity and a findings.
reliability test.
Scoring method (H1 – H8) The SAIDIN index method has There is considerable diversity Since inferences can differ
been introduced more recently in scoring methods, although substantially, depending on the
(i.e., 2016) in this literature, Cooke’s and the PC Method method used, future research
while other methods are well remain highly popular. could employ multiple scoring
established. methods to ensure robustness
of findings.
Materiality (K1 and K2) Studies filtering for materiality Prior literature makes limited Future research should
have only been published since use of materiality thresholds. consider materiality as a
2013. Studies which employ potential determinant in the
materiality thresholds find research design and/or sample
significant correlation between selection.
materiality and compliance
levels.
Sample composition (L1 – L3) Studies focusing on financial No clear pattern exists, given Studies focusing on financial
firms alone have been the almost equal numbers of institutions alone are scarce.
published since 2015 and studies which include financial This provides an opportunity
examine compliance with firms and those that exclude for future research, which
multiple accounting standards. them. could examine the market
consequences of compliance
for financial institutions.
compliance levels. Countries studied, and the timing of such studies, are likely to reflect, inter alia, the date of adoption of
IFRS, but also ontological and epistemological preferences in research cultures. Therefore, future research can draw on data
from more recent periods and from countries not examined previously.
Second, studies investigating compliance with a combination of IFRS (Multiple topics, E1) are generally limited to develop-
ing economies and/or developed but smaller stock markets. Therefore, compliance with standards such as IAS 2, 8, 10, 20, 21,
27 (now IFRS 10), 28, 31 (now IFRS 11), and IFRS 4 through 7 has yet to be investigated for larger, developed markets. A lack of
research is also noted for other key areas, including leasing, post-retirement benefits, and share-based payments. Although
these standards were included in several multi-topic studies, reported compliance scores have mostly been aggregated
rather than presented for each standard. Future research could examine compliance with new standards. For example, IFRS
9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers came into force in 2018, and IFRS 16 Leases is
applicable for periods starting on or after 1 January 2019. Given the cut-off point of this literature review and the application
dates of these standards, we identify no published research on compliance with these standards’ disclosure requirements.
Third, a common characteristic of most studies is that they focus on larger and non-financial firms. Thus, evidence for
smaller listed firms, which have different incentives in terms of financial reporting decisions and arguably fewer resources
to devote to financial reporting, is sparse. Also, a lack of evidence for financial firms suggests additional avenues for future
research.
Fourth, only 10 out of 70 studies investigate potential market consequences arising from compliance levels with manda-
tory disclosure requirements. The need for further evidence is reflected in recent calls for research on the economic
consequences of mandatory disclosure levels (Abdullah et al., 2015; Leuz & Wysocki, 2016; Mazzi et al., 2017). More evidence
is also required on potential associations between compliance levels and equity, or variables relating to debt markets (e.g.,
current or future returns, market values, share price liquidity, trading volume, access to and choice of debt markets, and
cost of private or public debt). Such investigations would also support standard setters’ work on the decision usefulness and
relevance of financial statements.
Fifth, with regard to the determinants of compliance, we note that being audited by a Big 4 firm is consistently positively
associated with mandatory disclosure levels. However, for developed markets there is limited evidence on the effect of
specific corporate governance mechanisms or corporate governance quality. The role of board members in financial reporting
decisions and quality may also provide avenues for future research in such markets.
Sixth, we note that with the exceptions of Mazzi, Slack, and Tsalavoutas (2018) and Glaum et al. (2013), multi-country
studies do not explore country characteristics (such as culture and corruption levels) as potential determinants of compliance,
although such characteristics have been traditionally linked with companies’ financial reporting behavior and quality (Ball,
Robin, & Wu, 2003; Bushman, Piotroski, & Smith, 2004; Hope, 2003; Leuz, Nanda, & Wysocki, 2003). Therefore, recent IFRS
related literature calls for such evidence (Akman, 2011; Houqe & Monem, 2016; Lourenço, Rathke, Santana, & Branco, 2018).
Seventh, although there is broad consistency in the data collection method employed, the way compliance scores are
computed differs significantly among studies, and few use multiple methods to ensure robustness. We also note that the
level of compliance reported, as well as the inferences drawn, differ with the scoring method used. Thus, we recommend
that future studies use several scoring methods in combination.
Eighth, we note that the literature has placed more emphasis on the validity of the research instrument employed than
on its reliability. We suggest that the rigor of future research could be increased if both types of checks were conducted.
Ninth, we note that only 10, mostly recent studies incorporated a materiality threshold. Hence, we recommend that
future studies consider a materiality threshold for disclosures. This is particularly relevant for periods after 2014, when the
revised IAS 1 came into force, which places greater emphasis on materiality.
An additional avenue for future studies that does not arise directly from the findings of the present paper relates to
surveys conducted by the European Securities and Markets Authority (ESMA) and many national regulatory bodies. Such
bodies frequently conduct surveys on compliance with accounting standards requirements and typically give rise to recom-
mendations for improvement. Identifying the effect (if any) of such monitoring activities could be an additional focus for
future research.
Finally, the knowledge gaps identified above suggest opportunities for different types of future research, including replica-
tion studies that draw on different settings, time periods, and topics, as well as studies that advance the field methodologically
and theoretically. Also, interdisciplinary research and evidence provided by other research methods, such as behavioral
experiments and interviews, would be beneficial to investigate preparers’ judgement and decision-making processes – both
as stand-alone studies and in combination with quantitative compliance research.
4.2. Policy implications
In January 2013, the IASB hosted a public Disclosure Forum to debate the issue of disclosure overload. Participants included
academics as well organisations that had previously undertaken or commissioned work on disclosure in financial reporting
(see European Financial Reporting Advisory Group (EFRAG) (2012); ICAS and NZICA (Institute of Chartered Accountants
of Scotland and the New Zealand Institute of Chartered Accountants) (2011)). In May 2013, the IASB issued a Feedback
Statement about this event. In July 2013, the chairman of the IASB, Hans Hoogervorst, presented a speech entitled ‘Breaking
the boilerplate’, in which he outlined ‘10 good proposals to make disclosures more effective’ (Hoogervorst, 2013). Since
then, the US Financial Accounting Standards Board (FASB) and EFRAG, among others, have also expressed concern about
the proliferation of mandated disclosures, and called for better communication in financial reporting. It has been argued
that because standards introduce disclosure requirements with the words ‘shall disclose’ and ‘at a minimum’, companies
view disclosures mandated by accounting standards as disclosures that must be provided, without considering a materiality
threshold. This results in a compliance exercise with extensive, and arguably unnecessary, disclosures (IASB, 2017, p. 83).
However, our review suggests that this is unlikely, given the generally low compliance levels (and high standard deviation
of non-compliance levels). Further, it appears that firms selectively ‘swamp’ users with trivial disclosures that are not costly
to provide, but do not comply where proprietary information is required to be communicated. Thus, the evidence brings to
light a challenge for one of the goals of the IFRS Foundation, i.e., to develop enforceable standards.30
This lack of compliance and the difficulty in enforcing IFRS have been highly contentious and have been among the SEC’s
arguments against the implementation of IFRS for US companies.31 The IASB acknowledges that there are too many disclosure
requirements, and that many lack clarity. Its recent Discussion Paper on the ‘Principles of Disclosures’ aims, inter alia, to ‘assist
the Board to improve disclosure requirements in Standards’ (IASB, 2017, p. 4). Our study identifies disclosure requirements
that appear to be problematic, i.e., where non-compliance is relatively high, and which necessitate improvement. However,
the varying levels of compliance across countries lend support to the argument that accounting standards themselves are
only part of the problem. A contributing factor may also be the standards’ translatability, and the timing and quality of
translations (see e.g. Abd-Elsalam & Weetman, 2003; Evans, Baskerville, & Nara, 2015). Further, financial reporting behavior
is also likely to vary because of the influence of different cultural and institutional characteristics.
In the 2017 Discussion Paper (IASB, 2017, para. 4.18, p. 41), the IASB also proposes a more principles-based general dis-
closure standard and the reduction of specific requirements. The findings of prior research, as summarized in our paper,
do not lend support to this proposal. Instead, they support alternative recommendations by the New Zealand Account-
ing Standards Board. These propose two tiers of disclosure requirements: entities would (i) provide mandatory summary
information, subject only to a materiality judgement (tier 1 disclosures); and (ii) assess whether additional information is
required, depending on the relative importance of the item or transaction to the entity and the degree of judgement required
in accounting for the item or transaction (tier 2 disclosures) (cited in IASB, 2017, p. 85). Effectively, this approach may go
some way towards clarifying what a company ‘should disclose’ and what, specifically, is required ‘at a minimum’ by the
standards. Such an approach has been frequently discussed and demanded by various stakeholders. Apart from preparers,
such clarification would also assist regulators and enforcement bodies in assessing whether a company is complying with
30
http://www.ifrs.org/about-us/who-we-are/
31
https://www.sec.gov/spotlight/globalaccountingstandards/ifrs-work-plan-final-report.pdf
a disclosure requirement, or whether the disclosures are in fact necessary (see Tsalavoutas et al., 2014, p. 19–20).32 Thus,
improvement in consistency and comparability of mandatory disclosures across companies and countries would be likely.
5. Conclusions
In the EU (and elsewhere), the mandatory adoption of IFRS in 2005 was met with scepticism. It was suggested that many
factors would provide ‘motives’ and ‘opportunities’ for non-uniform application (Nobes, 2006). One key area of concern was
that of (non-)compliance.
Accounting standards are only one element of the ‘financial reporting chain’ within a country (Damant, 2006, p. 30).
Cultural and institutional factors (such as enforcement mechanisms) affect how accounting is practiced and how accounting
information is perceived. Such factors differ significantly across jurisdictions (Ball, 2006; Larson & Street, 2004; Nobes, 2006;
Schipper, 2005; Soderstrom & Sun, 2007; Zeff, 2007, IASB, 2019).
In this review paper, we collate evidence from 70 studies that examine compliance with IFRS mandatory disclosure
requirements for periods after 2005. Our review indicates high levels of non-compliance in most countries examined. The
vast majority of studies (55/70) evaluate disclosures from firms in a single country and focus mostly on small markets
or less developed economies. The remaining studies (15/70) evaluate firm disclosures from more than one country and
mainly examine the largest firms listed in EU member states. The firm characteristics most commonly associated with
compliance levels include firm size, audit firm size, leverage, and corporate governance characteristics. Our review highlights
the lack of evidence for (i) smaller firms from developed markets, (ii) financial firms, (iii) the effect of corporate governance
characteristics on compliance, and (iv) the market effects of compliance levels. We provide suggestions on how future
research can address this lack of evidence and provide insights for future developments in accounting standard setting.
Further, we highlight several important and relevant research design issues and suggest that future studies should be more
methodologically robust by: (i) employing alternative scoring methods, (ii) performing, when relevant, validity and reliability
tests, and (iii) considering materiality.
As is the case with every study, our review is also subject to several caveats. First, while the SLR method may be more
rigorous than a traditional literature review, it nevertheless requires subjective judgement to interpret the findings. Other
researchers may interpret the results differently. Further, our data collection ends in February 2019. More recent empirical
studies may be available, which should be included in future reviews.
Declaration of Competing Interest
The authors declare that they have no known competing financial interests or personal relationships that could have
appeared to influence the work reported in this paper.
Acknowledgements
We gratefully acknowledge helpful comments received from Robert Larson (the Editor), two anonymous reviewers,
Khadija Almaghrabi, Dionysia Dionysiou, Francesco Mazzi and Richard Slack. We also thank Gillian MacIver for research
assistance in the early stages of this literature review. No funding was received from any sources.
Appendix A. List of studies used to identify the studies covered in this review
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27 Tsalavoutas, I. (2011). Transition to IFRS and compliance with mandatory disclosure requirements: What is the signal? 75
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33 Ahmed, J.U., & Karim, A.K.M. (2005). Determinants of IAS disclosure compliance in emerging economies: Evidence from 49
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37 Owusu-Ansah, S. (2000). Noncompliance with corporate annual report disclosure requirements in Zimbabwe. Research in 38
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38 Sucher, P., & Alexander, D. (2002). IAS Issues of Country, Sector and Audit Firm Compliance in Emerging Economies: Centre for 31
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39 Vlachos, C. (2001). An empirical investigation of the financial disclosure practices of Cypriot and Greek companies. PhD Thesis. 26
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40 Owusu-Ansah, S. (1998). The adequacy of corporate mandatory disclosure practices on emerging markets: A case study of the 20
Zimbabwe stock exchange. PhD Thesis. Middlesex University.
41 Samaha, K., & Stapleton, P. (2009). Firm-specific determinants of the extent of compliance with International Accounting 20
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42 Chatham, M.D. (2008). Assessing the extent of compliance with International Accounting Standards. Journal of 17
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43 Gebhardt, G., & Heilman, A. (2004). Compliance with German and International Accounting Standards in Germany: 16
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Total number of citations. 8514
Total number of citations after elimination of duplicates. 3970
*As of 19 February 2019. Note: As the full bibliographical detail is provided above and the articles themselves are not the
focus of our review, only eight of these references are included in the reference list at the end of this article.
Appendix B. Details of the 70 studies covered in this review (For explanation of the acronyms in this table, please see Table 2)
Study Period Index filter Country RQ First year of Research Scoring Validity/ Materiality Sample Mean/Median No firms/Obs. Key determinants & ABS rank;
adoption instrument method reliability composition compliance other Findings ABDC rank;
I. Tsalavoutas, F. Tsoligkas and L. Evans / Journal of International Accounting, Auditing and Taxation 40 (2020) 100338
score; Range Scopus
indexed
Multiple topics
Bova and Pereira 2005 NM Kenya D&MC No Kenya’s Other N/A No reference Inc 71%/79%; 75/75 (-): - (+): Leverage, 2; A; Yes
(2012) Financial 0–100% size, foreign
Reporting owners/Higher shares
Awards turn over
Glaum et al. 2005 Yes 17 EU D Yes Self- PC No/yes No reference Inc 73%; 12–100% 357/357 (-): Ownership 3; A; Yes
(2013) Countries constructed concentration (+):
Goodwill intensity, big
4, Audit committee
Tsalavoutas 2005 No Greece D Yes Self- PC & Cooke’s Yes/yes No reference Exc 79%/78%; 153/153 (-): EARN(+):Big 4, 2; B; Yes
(2011) constructed 50–95% BVE
Tsalavoutas and 2005 No Greece MC Yes Self- PC & Cooke’s Yes/yes No reference Exc 79%/78%; 139/139 NA/compliance is 2; C; Yes
Dionysiou constructed 50–95% value relevant
(2014)
Verriest, 2005 Yes 15 EU D Yes Self- Counting No/no No reference Inc 14 out of 15; 223/223 (-): MB, 3; 4*; Yes
Gaeremynck, Countries constructed items 6–15 LOCALGAAP-IFRS
and Thornton (+): Corporate
(2013) governance, EARN
Ballas and Tzovas 2006 No Greece D No Self- Cooke’s No/no No reference Exc 63%/64%; 32/32 (-): - (+): Listing 2; C; Yes
(2010) constructed 34–89%
Cascino and 2006 No Germany and D No Self- Cooke’s No/no No reference Inc German firms 289/289 German firms: (-): - 4; A*; Yes
Gassen (2015) Italy constructed 67%/69%; (+): Size, independent
Italian firms board, big 4, Gov.
68%/70% ownership Italian
firms: (-): Gov.
ownership, region (+):
Size, ROA, MB, losses
frequency,
independent board,
big 4
Alanezi and 2007 No Kuwait D No Self- Cooke’s Yes/yes No reference Exc 72%; 48–96% 68/68 (-): ROE, family 2; C; Yes
Albuloushi constructed member on board (+):
(2011) Leverage, audit
committee presence
Abdullah et al. 2008 No Malaysia D&MC No Self- PC & Cooke’s Yes/yes No reference Exc 84%/85%; 221/221 (-): % family members, 3; B; Yes
(2015) constructed 53–98% % board accounting
profession (+): %
independent
directors, No board
meeting, /Compliance
is not value relevant
Alfraih (2016) 2010 No Kuwait D No Self- Cooke’s No/no No reference Exc 70%; 41–91% 134/134 (-): CEO duality (+): 1; C; No
constructed Size, board size, board
diversity, family
members on the
board, multiple
directorships,
Amiraslani, 2010 Yes 25 EU D No Self- PC & Cooke’s Yes/yes Yes Exc Medians only: 324/324 (-): -(+): Goodwill (-)
Iatridis, and countries constructed PPE 86%; impairment intensity,
Pope (2013) goodwill 82%; size leverage, big 4
other
intangibles
77%
23
24
Appendix B (Continued)
score; Range Scopus
indexed
André, 2010 Yes 16 EU MC No Tsalavoutas PC & Cooke’s Yes/yes Yes Exc 84%/86%; 373/373 NA/Compliance is 2; A; Yes
Dionysiou, and Countries (2011) 25–86% value relevant and
Tsalavoutas increases analysts’
(2018) accuracy
Dawd (2018) 2010 No Kuwait D No Self- Cooke’s Yes/yes No reference Exc 58%; 31–72% 51/51 (-): - ROE (+): - 2; C; Yes
constructed
Dawd and 2010 No Kuwait C No Self- Cooke’s Yes/yes No reference Exc 58%/60% 51/51 NA/profitability is -; C; Yes
Charfeddine constructed negatively related to
(2019) the level of
compliance
Devalle et al. 2010 Yes Italy D No KPMG (2013) PC, Cooke’s, Yes/yes Yes Inc 73%/74%; 189/189 (-): % of financial costs 2; B; Yes
(2016) SAIDIN PC 47–94% on revenue (+): -
weighted
Juhmani (2017) 2010 No Bahrain D No Self- Cooke’s No/no No reference NM 81%; 61–94% 41/41 (-): CEO duality (+): 2; C; Yes
constructed Board independence,
big 4
Santos, Ponte, 2010 No Brazil D Yes Self- PC & Cooke’s No/yes No reference Exc 24%; 0–45% 366/366 (-): -(+): Size, big 4 -; -; Yes
and constructed
Mapurunga
(2014)
Tsalavouta et al. 2010 Yes 24 Countries D No Tsalavoutas PC & Cooke’s Yes/yes Yes Exc 83%/85%; 544/544 (-): Impairment (+): (-)
(2014) Across the et al. (2010) 25–100% US listing, audit
world enforcement
Che Azmi and 2011 Yes Malaysia C No KPMG 2012, Item by item Yes/no No reference Exc – 18/18 low compliance with 2; B; Yes
English (2016) Pricewater- both current and
houseCoopers future impact
2012, EY disclosures in IAS 17,
IAS 38 and IAS 37
Demir and 2011 No Turkey D No Self- Cooke’s No/no No reference Exc 79%/79%; 168/168 (-): Leverage (+): big 4 1; C; No
Bahadir (2014) constructed 64–92%
Bagudo, Manaf, 2012 No Nigeria D Yes Self- Cooke’s No/no No reference Inc 61%; 19–92% 154/154 (-): - (+): Size, -; C; No
and Ishak constructed Leverage, big 4
(2016)
Appiah et al. 2008–2012 No Ghana D No Self- PC No/yes No reference Inc 87%; 51–99% 31/147 (-): Age, leverage (+): -; C; No
(2016) constructed Size, big4
Zureigat (2015) 2008–2012 No Saudi Arabia D No KPMG (2012) Cooke’s Yes/no No reference FF 63%; 38–94% -/176 (-): - (+): size, -; C; Yes
leverage, big 4,
auditor experience
Khamees (2018) 2010–2013 No Jordan MC No Horani (2016) Cooke’s Yes/no No reference Inc 79%/80%; 190/- NA/compliance -; C; Yes
46–97% moderates the
relation between
current returns and
expected earnings and
intensifies the relation
between current
returns and
unexpected earnings
Ajili and Bouri 2010–2014 No Across the D No Self- Cooke’s No/no No reference FF 68%/70%; 90/232 (-): Leverage, age, 1; B; Yes
(2018) world (IB) constructed 23–89% Shariah Board of well
performing firms (+):
Size, ROE, subsidiary,
Shariah Board
Wang (2018) 2006, 2010, Yes Australia C No Deloitte Cooke’s Yes/no No reference Exc 2006: 90% 112/336 2; B; Yes
2014 (2006) and 2010: 92%
KPMG (2006) 2014: 91%
score; Range Scopus
indexed
Goodwill and goodwill impairment
Carlin and Finch 2006 Yes Australia C No Self- Item by item No/no No reference Inc – 200/200 – 1; B; Yes
(2011) constructed
Carlin, Finch, and 2006 Yes Australia C No Self- Item by item No/no No reference Inc – 200/200 – -; C; No
Ford (2008) constructed
Carlin et al. 2006 Yes Malaysia C Yes Self- Item by item No/no No reference Inc – 36/36 – -; C; No
(2009) constructed
Khairi (2018) 2006 No Singapore C No Self- Item by item No/no No reference Inc 192/192 70% of the firms are -; C; No
constructed fully compliant
Carlin et al. 2005–2007 No Singapore C No Self- item by item No/No No reference Inc – 168/504 key disclosures are 2; B; Yes
(2010) constructed missing, although
compliance improves
over time
Carlin and Finch 2006–2007 Yes Australia C No Self- Item by item No/no No reference Inc – 50/100 – 2; B; Yes
(2010) constructed
Baboukardos & 2008 No Greece MC No Deloitte PC & Cooke’s Yes/no Yes Exc 49%/44%; 76/76 NA/Goodwill is value 3; B; Yes
Rimmell (2009) 12–100% relevant only when
(2014) compliance with
goodwill disclosures is
high
D’Alauro (2013) 2006–2008 No UK and Italy D No Self- Counting No/no No reference Inc 5/6 out of 10; -/110 – -; -; Yes
constructed items 0–10
Florio et al. 2006–2008 No Italy D No Self- Cooke’s No/yes Yes Exc 66%/66%; 86/277 (-): - Size (+): material 2; A; Yes
(2018) constructed 31–96% business combination,
big 4
Hartwig (2015) 2005 2008 No Sweden D No Self- Cooke’s No/no No reference Inc Sweden: 2005: -/472 Sweden: (-): 2; C; Yes
Netherlands constructed 56%, 2008: Financials (+): Size
61.6% Netherlands: (-):
Netherlands: Leverage, financials
2005: 43%, (+): Most recent year
2008: 63
Bepari et al. 2006–2009 Yes Australia D No Self- Cooke’s No/no No reference Inc 54%; 0–100% -/911 (-): - (+): Big 4, 2; C; Yes
(2014) constructed goodwill intensity,
ROE, goodwill
impairment,
accounting and
finance expertise on
board
Bepari et al. 2006–2009 Yes Australia D No Self- Cooke’s No/no Yes Inc 61%; 0−100% -/916 (-): - (+): Big 4, 2; B; Yes
(2014) constructed goodwill intensity,
ROE, crisis
Finch et al. 2010 Yes Malaysia C No Self- Cooke’s Yes/yes No reference Inc 77%/81%; 20/20 -; C; No
(2013) constructed adjusted 31%–100%
Guthrie and Pang 2005–2010 No Australia C No Self- Item by item No/no No reference Inc – 287/1435 – 2; B; Yes
(2013) constructed
Camodeca, 2007–2011 Yes UK C No Self- Item by item No/no No reference Exc – 85/340 – -; C; Yes
Almici, and constructed
Bernardi
(2013)
Mazzi et al. 2008–2011 Yes 16 European D&MC No Self- Cooke’s, Yes/yes Yes Exc 82%/83%; 214/831 (-): Material business 3; A; Yes
(2017) Countries constructed SAIDIN & other 33–100% combination
occurrence
(+):Goodwill intensity,
impairment loss, size
/Compliance lowers
the cost of equity
capital
25
26
score; Range Scopus
indexed
Mazzi et al. 2008–2011 Yes 16 EU D No Mazzi et al. Cooke’s Yes/yes Yes Exc same as Mazzi 222/779 (-): Hierarchy, 3; B; Yes
(2018) countries (2017) et al. (2017) Embeddedness,
Material business
combination
occurrence,
(+):Mastery, Goodwill
intensity, impairment
loss, size, audit
strength, divergence
Rahman et al. 2010–2012 Yes Malaysia D No Self- Cooke’s No/no No reference Inc 69%/75%; 50/150 (-): - (+): Size, EPS, big -; C; No
(2018) constructed 0–100% 4
Lazar and Velte 2010–2015 Yes Germany D No Self- Cooke’s No/no No reference Exc 67%; 10–100% 25/150 (-): Goodwill intensity 2; C; Yes
(2018) constructed adjusted PC 2010: 59%; (+): ROA; goodwill
adjusted 2011: 65%; impairment
2012: 69%;
2013: 70%;
2014: 66%;
2015: 72%
Financial Instruments
Bamber et al. 2007 Yes UK C Yes Self- Cooke’s No/yes Yes Exc 95%/96%; 58/58 compliance is 3; A; Yes
(2018) constructed 69–100% positively related to
the number of words
related to financial
instruments
Tahat et al. 2006–2007 Yes Jordan MC No Self- Cooke’s No/yes No reference Exc pre-IFRS 7: 70/70 -/compliance is value 2; B; Yes
(2016) constructed 32%/28%; relevant
13–70%
post-IFRS 7:
52%/49%;
21–85%
Tauringana and 2007–2009 No Malawi D No Self- Cooke’s No/no No reference Inc 40%/43%; 13/39 (-): - (+): proportion of 2; C; No
Chithambo constructed 12–64/% non-executives, size,
(2016) leverage
Tahat et al. 2005–2012 No Qatar C No Self- Cooke’s No/yes No reference Inc 38%/35; 7–89% -/282 -/compliance -; C; No
(2018) constructed improves over time
Agyei-Mensah 2011–2013 No Ghana D No Tauringana Cooke’s Yes/no No reference NM 53%; 42–68% 30/90 (-): - (+): proportion of 2; C; No
(2017a) and non-executives
Chithambo
(2016)
Tahat et al. 2013–2014 No Jordan D No Self- Cooke’s Yes/yes No reference Inc 52%; 12–95% 82/164 (-): (+): -Size, big 4, -; C; Yes
(2017) constructed proportion of
independent
directors, presence of
audit committee
Agyei-Mensah 2013–2015 No Botswana and D No Tauringana Cooke’s Yes/no No reference NM Botswana -/174 Botswana (-): (+): 2; C; No
(2017b) Ghana and firms: 63%; institutional
Chithambo 52–78% ownership Ghana (-):
(2016) Ghanian firms: (+): proportion of
53%; 42–68% non-executives
score; Range Scopus
indexed
Business Combinations
Lucas and 2008 Yes 17 EU D No Self- Cooke’s No/no No reference NM 85%/88%; 302/302 (-): French/civil law 2; C; Yes
Lourenço Countries constructed adjusted 38–100% country (+): Leverage,
(2014) ROA, cross listed,
common law country
Taplin et al. 2009 No China C No Self- Item by item No/no No reference Inc – 344/344 Key disclosures are 3; A; Yes
(2014) constructed missing
Nakayama and 2010 No Brazil D Yes Self- Cooke’s Yes/no No reference Inc 85%/88%; 40/40 (-): - (+): Big 4, -; -; Yes
Salotti (2014) constructed 38–100% relative size
Souza and Borba 2010–2013 No Brazil MC No Self- Cooke’s No/no No reference Inc 29%; 7–66% -/102 NA/Compliance is -; -; Yes
(2016) constructed value relevant
Related party transactions
ElKelish (2017) 2010–2012 No UAE D No KPMG (2011) Cooke’s Yes/yes No reference Inc 12%/10%; 108/242 (-): - board size (+): 2; B; Yes
adjusted 2–31% Size, leverage,
competition,
ownership
concentration
Sellami and 2012–2014 No South Africa D No Self- Cooke’s Yes/yes No reference Exc 77%/ 50–100% 120/345 (-): Ownership 2; B; Yes
Fendri (2017) constructed concentration, (+):
Proportion of
independent directors
sitting on the audit
committee,
proportion of
accounting and
finance or industry
experts on the audit
committee,
proportion of
independent directors
and the firm’s size
Agyei-Mensah 2013–2016 No Ghana D No KPMG (2016) Cooke’s Yes/no No reference NM 26%; 6–55% 30/120 (-): - (+): gender -; C; Yes
(2019a) diversity on audit
committees,
independent
members in audit
committee, ownership
concentration
Income Tax
Ebrahim and 2007 No Egypt C No Self- Counting No/No No reference Exc 3.35/4 out of 5 116/116 (-): size (+): 3; B; Yes
Fattah (2015) constructed items institutional
ownership,
international affiliated
auditor, foreign board
member, family board
member
Lopes (2014) 2008 2012 Yes Portugal D No Self- Cooke’s No/no No reference Exc 2008: 46%; -/87 2008: (-): - (+): ROE, -; -; Yes
constructed 7–93% 2012: big 4 2012: (-):
55%; 0–98% Leverage, growth in
profit (+): Big 4
Mgammal et al. 2010–2012 No Malaysia D No Self- Cooke’s No/no No reference Exc 22%; 3–71% 286/888 (-): - (+): Size 2; C; No
(2018) constructed
Presentation of financial statements
Rahman and 2009 No Malaysia D No Self- Cooke’s Yes/yes No reference Exc 93%/93%; 105/105 (-): - (+): Size 2; C; Yes
Hamdan constructed 83–100%
(2017)
Alrawahi and 2013 No Bahrain D No Self- Cooke’s Yes/no No reference Inc 83%; 77–94% 36/36 (-): - (+): Big 4, ROE 1; C; Yes
Sarea (2016) constructed
27
28
score; Range Scopus
indexed
Decommission costs
Abdo et al. (2018) 2014/2015 No UK C No Self- Cooke’s No/yes No reference Exc 63%; 0–100% 68/68 Certain disclosures are 3; B; Yes
constructed missing
Exploration costs
Abdo (2016) 2006–2014 Yes Canada, Hong C No Self- Item by item No/no No reference Exc – 118 16% of sampled firms 2; B; Yes
Kong, Ireland, constructed do not specify method
UK, Fortune of accounting
Index treatment (AIM
listed). IFRS 6 has had
some success in
harmonising
accounting treatments
of exploration and
evaluation expense
Intangible assets
Agyei-Mensah 2016 Yes Ghana D No KPMG (2016) Cooke’s Yes/no No reference NM 61%; 50–70% 110/110 (-): - (+): big 4, 2; C; No
(2019b) leverage, intangible
intensive industry
Operating leases
Arimany et al. 2005–2011 Yes UK and Spain D No Self- Other NA/Yes No reference Exc – 194/1358 (-): - (+): Size, ROE, 1;- ; No
(2018) constructed media coverage, UK
firms
Provisions
Acar and Ozkan 2005–2010 No Turkey D No Self- Other No/No No reference Exc 32%/0%; -/1078 (-): - (+): ownership 1; C; Yes
(2017) constructed 0–100% concentration, board
size
Share-based payment
Goh et al. (2016) 2005 Yes France D&MC Yes Self- Cooke’s No/no No reference Inc 61%/62% 136/136 (-): - CEO ownership, 2;B; Yes
constructed adjusted proportion of total
shares under option
(+): Size, US listing %
of shares owned by
UK or US firms, annual
report in English/
compliance improves
value relevance of
option expense
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Journal of International Accounting, Auditing and Taxation 40 (2020) 100338

Contents lists available at ScienceDirect

Journal of International Accounting,

Compliance with IFRS mandatory disclosure requirements:

2. Methodology: structured literature review (SLR)

2.1. The literature review protocol

2.2. Research questions

2.3. The literature search

Fig. 2. The process employed to identify articles for review.

2.4. Article impact

2.5. The analytical framework

2.6. Developing reliability

2.7. Testing literature review validity

A Number of countries F First year of adoption

D Research question (RQ) I Validity & reliability

Adapted from Dumay et al. (2016) and Guthrie et al. (2012).

3. Insight and critique

Fig. 3. Number of relevant single- and multi-country studies.

3.1. Number of countries (A1 – A4)

3.2. Firm size ﬁlter (B1 – B3)

3.3. Location/Regions (C1 – C6)

3.4. Research question (D1 – D4)

3.5. Accounting topic examined (E1 – E8)

3.5.1. Multiple topics (E1)

3.5.2. Goodwill and goodwill impairment testing (E2)

3.5.3. Financial instruments (E3)

3.5.4. Business combinations (E4)

3.5.5. Related party transactions (E5)

3.5.6. Income tax (E6)

3.5.7. Presentation of ﬁnancial statements (E7)

3.5.8. Other (E8)

3.6. First year of adoption (F1 – F2)

IAS 17 9 6 6 100% Abdullah et al. (2015); Cascino and

IAS 38 16 10 4 40% Agyei-Mensah (2018), Cascino and

3.7. Research instrument (G1 – G4)

3.8. Scoring method (H1 – H7)

3.9. Validity and reliability (I1 – I6)

3.10. Materiality (K1 and K2)

3.11. Sample composition (L1 – L4)

4.2. Policy implications

Declaration of Competing Interest

References No. of Citations*

IASB. (2017). ‘Disclosure initiative’, discussion paper.. http://www.ifrs.org/-/media/project/disclosure-initative/disclosure-initiative-principles-of-

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